TMI Blog2002 (12) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the main applicant company have two EHTP Units, namely EHTP-1 and EHTP-2, where they manufacture and export ultrasound scanners, X-ray generators, MR Tables, etc. For the manufacture of the said equipments, the main applicant imports several materials, components, spares, etc. under EHTP Scheme, availing the benefit of Notfn. 96/93-Cus., dt. 2-3-93, read with Sec. 72 of the Customs Act, 1962 under two licences issued in terms of 100% EOU-EHTP scheme for inbond manufacture, development, storage and export of ultrasound scanners and X-ray generators from Unit No. 1, and magnetic resonance table at Unit No. 2. The officers of DRI, Bangalore visited their premises on 18-12-2001 and verified the documents and the physical stock of duty free imported items. It was observed that there were variations in the actual stock when compared with the stock as per the books/records maintained by the main applicant company. Accordingly, the SCN had alleged that duty free imported goods valued at Rs. 3,44,67,731.06 were not found physically at the time of visit of the officers of DRI, and goods valued at Rs. 1,98,88,171/- have not been utilized within the warehousing period of one year, renderin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hearing, the Advocate submitted a tabular statement indicating the duties so far paid by the applicant in this regard. The said table indicated that the main applicant had paid till then totally Rs. 2,79,71,871/-, of which it was stated by the Advocate that Rs. 22,72,160/- pertained to the period beyond the period covered by the SCN. Accordingly, the total duty liability admitted and paid by the applicant works out to Rs. 2,56,99,711/- (Rs. 2,79,77,871 - Rs. 22,72,160). It has been further pleaded that initially the (stock accounting/balance) error had accrued due to a new software utilized for computerized accounting, which resulted in a mis-match between the balance as per their computerized accounting and the physical balance of parts/components available on shop floor. A detailed scrutiny by them, after the detection of the error by DRI, has enabled them to quantify exactly the quantum of unutilized goods lying in the warehouse beyond the permitted/extended period of warehousing, and also the quantum of unreconciled goods, resulting in admission of a higher duty liability than what was alleged in the SCN. It was also pleaded that they have since tightened up their periodic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k up investigation. Accordingly, he pleaded forcefully that immunities sought for should not be granted, or atleast a difference in approach should be adopted in respect of immunity from interest on the value of goods lying beyond the permitted period in the warehouse and totally missing goods. 5.0 We have considered the counter claims and submissions made by the applicants, as well as the respondent Commissioner, and have also gone through the relevant records of the case. At the outset, the Bench would like to place on record that there is no dispute on the basic allegations that some part of the goods imported and cleared to applicant s premises availing benefit of Notfn. 96/93-Cus., dt. 2-3-93 had not been utilized at all for the purpose they were intended under Notfn. 96/93, either because they were seen lying unutilized beyond the permitted/extended period for warehousing, or were found not reconcilable with reference to the accounting in the computer system and, therefore, were also not available on in the applicant s premises. While the SCN has demanded duty of Rs. 2,53,57,559.60 on the goods totally valued Rs. 5,43,55,902.50, the main applicant has finally admitted a lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had observed in its report that in the administration of fiscal laws whose primary objective is to raise revenue, there has to be room for compromise and settlement. Accordingly, the committee recommended that there should be a provision in the law for settlement with the tax payer at any stage of the proceedings. The provisions relating to Income Tax Settlement Commission have been the subject matter of disputes raised before various High Courts which have upheld the settlement process. To cite one example, the Hon ble High Court of Karnataka held in the case of Krishnan v. Settlement Commission [(1989) 180 ITR 585] that The Settlement Commission was to be constituted for settling complicated claims of chronic tax evaders as a extraordinary measure, for giving an opportunity to such persons to make a true confession and to have matters settled once for all and earn peace of mind . Thus, the rationale of Wanchoo Committee recommendation, and got upheld in the context of Income Tax Settlement Commission is that if the tax payer takes the initiative and voluntarily discloses the facts of his past frauds and their full extent, there should be no need for instituting criminal procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner the main applicant company s senior executives in the management including the executive responsible for the impugned goods as Materials Manager had been aware of the fact of part of the impugned goods not being available on shop floor, and another part lying beyond one year in the warehouse. They had also been periodically writing off certain quantum of unreconciled value of such material. On a question from the Bench during the final hearing it was also admitted that statutory audit of materials had been conducted in the past by their American auditors, but the auditors did not endorse them a copy of the result. Though Annexures A 9 A 10 indicate evidence of local sales and diversion of some small quantities of the impugned goods to their own unit in DTA, major part of the unreconciled goods themselves are missing. The applicant has no explanation excepting to refer to the following observations contained in para 21(i) of the SCN : From this, it is clear that the company has no explanation to show that the goods not found as per the books may not be true. However, since there is no other option but to take their version as not sold all these goods in the local mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue submitted during the final hearing that the said goods are not under their seizure, rendering the request for permission of this Bench as superfluous and not necessary. The main applicant has also not pointed out the order of Revenue under which the said goods stand seized/ confiscated. 8.0. Taking into account the above facts and circumstances, the case is settled in terms of sub-section (7) of Sec. 127C of the Customs Act, 1962 on following terms and conditions :- 1. The total duty liability is settled at Rs. 2,56,99,711/-. As the applicant has paid the entire amount under various challans as indicated in their work sheet entitled Details of the amounts paid by M/s. Wipro GE Medical Systems Ltd., Bangalore, from time to time for settlement of the case , handed over on the day of final hearing, no further amount remains to be paid by the applicant. 2. Immunity is granted in terms of Sec. 127H(1) of the Customs Act, 1962 from penalty, fine and prosecution under the Customs Act, 1962 to the main applicant M/s. Wipro GE Medical Systems Ltd., Bangalore, as also to Shri D.A. Prasanna, Managing Director, M/s. Wipro GE Medical Systems Ltd., Bangalore. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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