TaxTMI 
TaxTMI 
2016 (11) TMI 681
X X X X Extracts X X X X
X X X X Extracts X X X X
....d and the other three petitioners before the court. The show cause notice, inter alia, was that the petitioners are 100% Export Oriented Unit manufacturing and exporting electronic parts had indulged in mis-declaration with respect to importation of goods. The show cause notice was defended by the petitioners; culminated in an adverse order by the Commissioner who, inter alia, held as follows: "(i) I order confiscation of 22,56,74,100 pcs. of Solder Preforms imported in excess of the declared quantity vide BOI No.211144 dated 8.2.95 under Section 111 (j) and 111 (I) of the Customs Act, 1962 and confiscation of 2,25,900 pcs. of solder performs under Section 119 and 111 (m) of the Customs Act, 1962 as these had been used as concealme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iv) I do not impose any penalty on Shri Chattopadhyaya, the employee of M/s Lesag HBB (India) Ltd. as well as the clearing agent, M/s Vardhman Customs Clearing and Forwarding Agents under Section 112 of the Customs Act, 1962." 2. The company- the first petitioner in this case applied under the Kar Vivad Samadhan Scheme, 1998 and made an appropriate declaration with respect to its liability. Having regard to the totality of circumstances on 11.03.1999, the declaration of the company was accepted and an order was passed under Section 19(1) of the Finance (II) Act, 1998. The amount determined as payable under Section 88 of the Finance Act was Rs. 5,50,090/-. It is not in dispute that the said amount was paid. 3. In the meanwhile the othe....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 6. It is evident from the above facts that the principal noticee's liability i.e. (of the company) was the real basis for the finding of abatement recorded against the other petitioners who were employees. The order of adjudicating authority amply clarifies that not only tax but the penalty imposed against the company was to a substantially higher degree than that against the present petitioners. Customs duty to the extent of Rs. 11,00,179.55 and penalty to the tune of Rs. 5 lacs was imposed upon the company. However, as regards the other petitioners only penalty on the finding of abatement was recorded. 7. In Onkar S. Kanwar (supra) Supreme Court, inter alia, observed as under: "12. We are unable to accept this submission.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sly or not. He submitted that the object was to give benefit to all Directors/Officers of the Company. He submitted that the restricted interpretation would defeat the object. 14. We have heard the parties. In our view, a reading of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order shows that where a declaration had been made in respect of a tax arrear and where in respect of the same matter a show cause notice had also been issued to any other person, then the settlement in favour of the declarant has to be deemed to be full and final in respect of other persons on whom show cause notices had been issued. It is settled law that when an Appeal is pending there is no finality to the proceedings. The proceedings are then ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e benefits only to cases where the show cause notice is pending adjudication, would be unreasonable. If read in this manner the Order would be discriminatory. An interpretation which leads to discrimination must be avoided. An interpretation, as suggested by Mr. Ganesh, would also be against the object of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order. It is therefore not possible to accept the submissions of Mr. Ganesh. In our view the reasoning given by the High Court of Kerala is correct and needs to be upheld." 8. From a bare reading of the above extracts what emerges is that the tax arrears of the Directors and officers of a company can be proceeded with independently, if they do not join it in making an application. ....