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TMI ID= 182253
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2014 (12) TMI 1228 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE, KOLKATA

In Re : Rohit Ferro Tech. Ltd.

Demand of duty, interest and penalty - Export of Ferro Silicon - Obtained 54 DEPB licences by wilful misstatement and suppression of country of origin and availed export incentive on export of Bhutanese origin, therefore, no DEPB benefit to be available - DEPB licences were sold by the exporter and were utilized by the purchasers for payment of duty on goods imported by them.

Held that:- Out of total duty demanded ₹ 3,20,46,327/-, only a sum of ₹ 25,10,066/- has been demanded from the applicant and the balance from other importers. None of these importers have approached the Settlement Commission. As per sub-section (1) of Section 127B of the Customs Act, 1962, "Any importer, exporter or any other person may, in respect of a case, relating to him make an application before adjudication to the Settlement Commission to have the case settled". Further, an order of settlement under Section 127C(8) has to provide for the terms of settlement including any demand by way of duty, penalty and interest. In the present case, Bench is unable to settle these terms as none of the persons from whom a major portion of duty has been demanded in the SCN have approached the Settlement Commission and some of them do not even fall in the jurisdiction of this Bench. Therefore, in the absence of the same, the application to settle the duty demanded from those other importers by the applicant cannot be entertained. - Application rejected

No.- Settlement Application No. 1025/2014 in File No. C-485/CUS/2014-SC(KB)

Order No.- Final Order No. F-445/CUS/2014-SC(KB)-Rej

Dated.- December 8, 2014

Citations:

  1. Union of India Versus M/s Rajasthan Spinning & Weaving Mills AND Commissioner of Customs and Central Excise Versus M/s. Lanco Industries Ltd. - 2009 (5) TMI 15 - SUPREME COURT OF INDIA

Shri Karan K. Sharma, Vice-Chairman and C. Dube, Member

Shri R.K. Chowdhary and B.N. Pal, Advocates, for the Assessee.

Shri Xavier Tigga, Appraiser Export, Suman Kr. Gangopadhyay, SIO and Rohit Kr. Singh, IO, for the Department.

ORDER

This order is in regard to Settlement Application No. 1025/2014 filed by M/s. Rohit Ferro Tech Ltd., Factory : - Dwarika, WBIDC Road, Bishnupur, West Bengal Pin - 722122, Head Office - SKP House, 132A, S.P. Mukherjee Road, Kolkata - 700026 (hereinafter referred to as ‘the applicant) under Section 127B of the Customs Act, 1962 (in short ‘the Act’). The application has been filed for settlement of the dispute arising out of Show Cause Notice DRI F. No. 66/KOL/APP/ 2012/54, dated 3-1-2014 (hereinafter referred to as ‘the SCN’) issued by the Additional Director General, Directorate of Revenue Intelligence, Kolkata Zonal Unit (‘DRI’ for short) answerable to the Commissioner of Customs (Port), Kolkata Custom House, 15/1 Strand Road, Kolkata - 700 001 (hereinafter referred to as ‘the jurisdictional Commissioner’ for short).

2. The brief facts of the case as per the SCN are that Rohit Ferro Tech Limited, (referred to as the exporter in the show cause notice), exported a total quantity of 11,568.59 MT of Ferro Silicon, during 2008-2009 to 2013-2014, which was declared to be of Indian origin in the relevant shipping bills, invoices and country of origin certificates, but was actually of Bhutanese origin.

2.1 The exporter obtained 54 DEPB licenses against these exports and availed total export incentive of ₹ 3,20,46,327/- on export of Ferro-Silicon of Bhutanese origin on which no DEPB benefit appeared available. Since these DEPB licences/authorizations were procured by wilful misstatement and suppression of country of origin, they appeared to be liable to cancellation/partial modification. These DEPB licences were sold by the exporter and were utilized by the purchasers for payment of duty on goods imported by them.

2.2 DEPB Licence No. 210188342 was obtained by the said exporter on 3-4-2013 and importation against DEPB Licence Nos. 210169501, dated 23-11-2011, 210170774, dated 14-12-2011 and 210170777, dated 14-12-2011 took place after 28-5-2012 i.e. after Finance Bill, 2012 received assent of President of India thereby sanctioned introduction of Section 28AAA of the Customs Act. As such, duty foregone amounting to ₹ 25,10,066/- on the strength of those DEPB licences appears to be recoverable from the said exporter under Section 28AAA of the Customs Act, along with interest in terms of Section 28AA of the Customs Act, 1962. A list of importers who had imported goods utilizing those licences were identified and amount of duty payable by them for utilization of licences which are liable for cancellation is mentioned in Annexure-D to the SCN.

2.3 After completion of investigation, the above-mentioned SCN was issued requiring (i) the applicant, (ii) Shri Suresh Kr. Patni, Chairman (iii) Shri Ankit Patni, Joint Managing Director, (iv) Shri Rakesh Kr. Agarwal, Director-Corporate; and (v) Shri Ashok Kr. Mishra, Sr. AGM to show cause before the Commissioner of Customs (Port), Kolkata Custom House, 15/1 Strand Road, Kolkata - 700 001 within thirty days as to why :

“(i) 11068.59 MT Ferro silicon of FOB value of ₹ 68,78,11,804/- exported under cover of shipping bill numbers as mentioned in Annexure-D attached with this notice through Kolkata/Haldia Port shall not be held liable for confiscation in terms of Section 113(i) of the Customs Act, 1962.

(ii) Penalty under Section 114 and Section 114AA of the Act shall not be imposed on them for the act of omission and commission undertaken by them.

(iii) Duty amounting to ₹ 25,10,066/- not paid at the time of importation on the strength of DEPB license nos. 210188342, dated 3-4-2013, 210169501, dated 23-11-2011, 210170744, dated 14-12-2011 and 210170777, dated 14-12-2011 shall not be held recoverable from them in terms of Section 28AAA of the Customs Act, 1962 along with interest in terms of Section 28AA of the Customs Act, 1962.”

2.4 The importers who had purchased the DEPB licences from Rohit Ferro Tech Ltd. issued against these exports and had utilized the same for payment of duty on importation of goods and mentioned in Annexure D to the SCN, were required to show cause in writing to the jurisdictional officers of Customs, as to why import duty mentioned in Annexure-D against their names & not paid by them at the time of importation of goods under cover of bills of entry numbers mentioned in Annexure-D shall not be held recoverable from them in terms of Section 28(1) of the Customs Act, 1962 along with interest.

3. In his application for settlement, the applicant admitted duty of ₹ 3,20,46,327/- along with interest as payable for settlement and also intimated payment particulars for the same. The applicant also requested for immunity from fine, penalty and prosecution.

3.1 Notice under Section 127C(1) of the Act was issued to the applicant on 8-7-2014 and a report under Section 127F(3) of the Act, along with relevant case records, was called for on 22-7-2014 from the jurisdictional Commissioner and the ADG, DRI.

4. DRI in its letter dated 7-8-2014 informed that the correct amount of duty liability in this case is ₹ 3,12,60,465/- and not ₹ 3,20,46,327/- and also contested the request of the applicant for immunity from penalty. The payment of the amounts mentioned as accepted by the applicant and interest thereon was also confirmed.

5. The matter was heard on 29-10-2014. Shri R.K. Chowdhary and Shri B.N. Pal, Advocates appeared on behalf of M/s. Rohit Ferro Tech Ltd. The Department was represented by S/Shri Xavier Tigga, Appraiser (Export Deptt.) and Suman Kr. Gangopadhyay, SIO, DRI, Kolkata Zonal Unit. The learned Advocate appearing on behalf of the applicant sought adjournment, which was granted.

6. The matter was heard on 18-11-2014. Learned Advocates appearing on behalf of M/s. Rohit Ferro-Tech Ltd. submitted that Paras 54, 55 and 56 of the SCN are to be read together. They further submitted that in all these paras, the name of their client, M/s. Ferro-Tech Ltd. appears and they are concerned with that. It was further submitted that the goods are not available for confiscation and accordingly, there is no proposal for confiscating the goods and therefore no goods can be liable for confiscation and consequently, no penalty can be imposed under Section 114 of the Customs Act, 1962. They also placed reliance on the 27th Standing Committtee on Finance (2005-2006) relating to Section 114AA. As per this note, Section 114AA has application in this case and hence no penalty can be imposed under Section 114AA. They also relied on the judgement in the case of Rajasthan Spinning & Weaving Mills v. Union of India [2009 (238) E.L.T. 3 (S.C.)]. It was also submitted that the SCN does not contain any provision for imposition of redemption fine.

7. The Department represented by S/Shri Suman Kr. Gangopadhyay, SIO and Shri Rohit Kr. Singh IO, DRI, Kolkata Zonal Unit, submitted that the SCN demands duty under Section 28 of the Customs Act, 1962. Further, Para 54(i) contains the clause for proposal of confiscation of goods. It was also stated that since the goods were liable to confiscation, they are also liable to penalty under Section 114A of the Customs Act, 1962. Further, the exporter in this case had misdeclared the important details, country of origin of the goods exported and accordingly the provisions of [Section] 114AA are attracted.

8. The Bench has considered the application requesting for settlement and grant of immunities from penalty, fine and prosecution, the show cause notice and the submission, written and oral of the applicant and the Department. The total amount of duty demanded in the SCN is ₹ 3,20,46,327/-. Out of this, only a sum of ₹ 25,10,066/- has been demanded from the applicant. The balance amount of ₹ 2,95,35,261/- has been demanded from other importers, 43 of whom are listed in Annexure-D to the SCN. None of these importers from whom duty has been demanded have approached the Settlement Commission. As per sub-section (1) of Section 127B of the Customs Act, 1962, "Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, in respect of a case, relating to him make an application before adjudication to the Settlement Commission to have the case settled...." Further, an order of settlement under Section 127C(8) has to provide for the terms of settlement including any demand by way of duty, penalty and interest. In the instant case, Bench is unable to settle these terms as none of the persons from whom a major portion of duty has been demanded in the SCN have approached the Settlement Commission and some of them do not even fall in the jurisdiction of this Bench. In the absence of the same, the application to settle the duty demanded from those other importers by the applicant cannot be entertained. Accordingly, the application is rejected.

9. A copy of this order be given to the applicant, jurisdictional Commissioner and all concerned authorities.

 
 
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