TaxTMI 
TaxTMI 
2018 (1) TMI 1456
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....h Airport and Air Cargo Complex, Bangalore, totalling to Rs. 26,91,710/- along with applicable interest. The applications bearing no. S.A.Cus/15-16/2017 SC were settled vide Final Order No. 31-32/2017-Cus., dated 31-7-2017. 1.2 In the same SCN there was a demand of differential Customs Duty to the tune of (i) Rs. 20,50,149/- for the contraventions of import made through ICD, Bangalore and (ii) Rs. 2,30,817/- for the contraventions made in respect of imports made through Air Cargo, Bangalore, totalling Rs. 22,80,966/- along with applicable interest pertaining to M/s. Vriddhi Interiors, Bangalore (holder of IEC 0709014988). M/s. Vriddhi Interiors, Bangalore had also filed their applications before the Settlement Commission which were allotted No. S.A.Cus/17-18/2017 SC and were settled vide Final Order No. 33-34/2017-Cus., dated 31-7-2017. M/s. Vainatheya International Agency and M/s. Vriddhi Interiors accepted the entire duty demand and paid the differential duty along with applicable interest. 1.3 The present application pertains to Shri B.M. Rakesh, Managing Partner of M/s. Virddhi Interiors, Bangalore, a co-noticee in the instant SCN and he has filed Settlement Applica....
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...., of the Customs Act, 1962 etc. revealed that : * M/s. Vainatheya is a Proprietary concern of which Shri B.M. Rakesh is the proprietor and M/s. Vriddhi Interiors is a partnership firm of which Shri B.M. Rakesh is the Managing Partner with his wife as the other partner, whereas he was taking care of all activities relating to both the firms; * The applicants were engaged in the import and trading of furniture, sanitarywares and light fittings mainly from Italy, Belgium, Spain etc. for various consumers in India and the imports were effected through ICD, Bangalore and Air Cargo Complex, Bangalore; * The goods imported by the applicants were displayed in the showroom of one M/s. Samaavesh, and eventually sold off from there after Shri B.M. Rakesh transferring the goods to the premises of M/s. Samaavesh, under an invoice, of which the amount would be the landed cost plus 5% mark up for the goods imported; subsequently the goods would be cleared from the showroom of M/s. Samaavesh under an invoice of M/s. Samaavesh with a small mark-up percentage and it was Shri B.M. Rakesh who collected the payment from customers too; * Shri B.M. Rakesh was in complete know-how of the goods imp....
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....national Agency and M/s. Vriddhi Interiors had rendered the goods liable to confiscation and knowingly made/submitted false/incorrect statements and documents to Customs; * Shri Rakesh was taking care of all activities relating to both the firms to compete the market by way of adopting two set of invoices, one proforma invoice with lesser value to customs and another invoice with high value for actual payment. The excess payments were made to the supplier through agents via non-banking channel. * The import made by M/s. Vainatheya International Agency and M/s. Vriddhi Interiors through ICD, Bangalore were of 14 and 11 consignments, respectively and through Air Cargo Complex, Bangalore were of 33 and 2 consignments, respectively during the period 1-4-2011 to 31-12-2014 as listed in the Annexure A, B, A1 and B1 to the SCN. 1.10 Based on the investigation, SCN has been issued to the all entities answerable to the respective Jurisdictional Commissioners. 1.11 M/s. Vriddhi Interiors, was called upon to show cause to the Joint/Additional Commissioner of Customs, ICD Bangalore as to why : - (i) the total assessable value of Rs. 1,67,70,398/- ....
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.... Section 111(m) of the CA, 1962; (iv) penalty should not be imposed on them under Section 112(a) and/or Section 114AA of the Customs Act, 1962; (v) penalty should not be imposed on M/s. Vriddhi Interiors under Section 114AA of the CA, 1962; (vi) penalty should not be imposed on Shri B.M Rakesh under Section 112 of the CA, 1962; (vii) penalty should not be imposed on Shri B.M Rakesh under Section 114AA of CA, 1962. Averments of the Applicant 2.1 Shri B.M. Rakesh, Managing Partner of M/s. Vriddhi Interiors, Bangalore, the applicant in the instant case, in his application dated 4-8-2017 has submitted, inter alia, that : * The application was filed by him in his individual capacity as co-applicant to the application already filed by M/s. Vriddhi Interiors; * M/s. Vriddhi Interiors had already filed application before the Hon'ble Settlement Commission vide Ref. No. SA(C) 17-18/2016-SC and order has been passed vide Order No. 33-34/2017-Cus., dated 31-7-2017; * As he had not filed an application for settlement along with the main applicant M/s. Vriddhi Interiors, the application is now being filed for settlement of th....
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.... application as Proprietor whereas in the case of M/s. Vriddhi Interiors he has filed the application as Managing Partner. * Section 127L(i) of the Customs Act, 1962 categorically provides that where an order of Settlement provides for the imposition of penalty on the applicant on the ground of concealment of particulars of his duty liability then such person shall not be entitled to apply for settlement under Section 127B in relation to any other matter. * Shri B.M. Rakesh, as proprietor of M/s. Vainatheya International Agency has already filed an application for settlement as he has concealed the particulars and undervalued the goods. Further, he vide his letter dated 13-10-2017 has submitted that he had paid Rs. l,30,000/- penalty which was imposed on him by the Hon'ble Settlement Commission, Chennai on M/s. Vainatheya International Agency. * In view of the bar provided by Section 127 of the Customs Act, 1962 as Shri B.M. Rakesh as a Proprietor of M/s. Vainatheya International Agency has already filed an application and the same was considered, the subject application is not maintainable. Hearing 5.1 The case was heard on 21-12-2017. The applicant was represented by....
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....ated 20-12-2017 and argued that the current application is not maintainable in terms of the bar imposed under Section 127L(i) of the Customs Act, 1962 as Shri B.M. Rakesh, as Proprietor of M/s. Vainatheya International Agency has filed an application for settlement as he has concealed the particulars and under-valued the goods; that further he himself, submitted that he has paid Rs. 1,30,000/- as penalty which was imposed by the Hon'ble Settlement Commission on M/s. Vainatheya International Agency; and that in view of the bar provided by Section 127L of the Customs Act, as Shri B.M. Rakesh, as a Proprietor of M/s. Vainatheya International Agency, has already filed an application and the same was considered, the subject application is not maintainable. 5.7 The consultant for the applicant, as a rejoinder, stated that the bar imposed under Section 127L of the Customs Act is applicable only in respect of 'any other matter' as envisaged, but whereas the current application filed is relating to the same matter dealt with earlier by the Hon'ble Bench. Findings : 6.1 The Bench has gone through the application filed by the Co-applicant in this case and also considered the subm....
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....ts Final Order No. 33-34/2017-Cus., dated 31-7-2017 the Bench imposed a penalty of Rs. 1,10,000/- on M/s. Vriddhi Interiors, Bangalore. Both the above mentioned Settlement Orders were despatched from this Office on 1-8-2017 and received by the applicants on 5-8-2017 and 9-8-2017 respectively as per the applicant. 6.4 The applicant argued that when the Department is reckoning the date on which the application was submitted to the Commission, it is logical that the date on which its Order was received by the applicant should be considered as the date to reckon with. They also submitted that in order to give effect to any order of the Judiciary, the date of receipt of the Order is the date of reckoning. The applicant relied on the decision of the Hon'ble High Court of Delhi in the case of P.K.S. Srivastava v. UOI and others in WP (C) No. 10392/2015, dated 1-12-2016 [2016 SCC Online Del. 6149] where it was held in Para 6 as follows : "A cause of action in law means that an enforceable right in law accrues. When a right accrues simultaneously a liability also accrues against that person. If an enforceable right arises only on communication of the Order, then, a cause of action ar....
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....led by the applicant is relating to the same matter dealt earlier by the Bench arising out of the same SCN. Thus the Bench holds that the instant application is maintainable under the relevant provisions of the Customs Act, 1962. 6.8 The second issue to be decided is whether penalty is imposable on Shri B.M. Rakesh, Managing Partner of M/s. Vriddhi Interiors. Shri B.M. Rakesh, Managing Partner of M/s. Vriddhi Interiors vide his statement dated 28-7-2015 given under Section 108 of the Customs Act, 1962 had, inter alia, admitted that the invoices submitted by M/s. Vriddhi Interiors and M/s. Vainatheya International Agency to Customs Authorities for assessment purposes were undervalued to evade payment of appropriate Customs Duty. He further agreed that this undervaluation was done only with purpose of being competitive in the market. The entire modus operandi as to how the applicant devised a scheme to evade the payment of applicable Customs duty is discussed in detail in the paragraphs supra. Thus it is seen that the duty evasion has been resorted to by way of wilful misstatement, suppression of facts and misdeclaration of their import values and clearances of import goods. It....