Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2007 (7) TMI 514

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed upon the appellants on the allegations and findings that they aided and abetted one M/s. Amrit Laxmi Machine Works, Bombay in duty free imports against duplicate advance licences. 2. After hearing both the sides, we find that proceedings were also initiated against M/s. Amrit Laxmi Machine Works. However, the said noticee settled the dispute in Settlement Commission who vide its Order No. 38/2002 dated 5-9-2002 settled the case on terms that an amount of Rs. 15,94,565/- (Rupees fifteen lakhs ninety four thousand five hundred sixty five only) deposited by the said notice be appropriated towards the admitted duty liability along with interest at the rate of 10%. Immunity was granted to the said noticee from fine, penalty and prosecution. As such, it is the appellant s case that no penalty having been imposed upon the main offender, imposition of penalties upon them in terms of the provisions of Section 112 is not called for. It is settled law that co-accused cannot be vested with any higher penal consequences than main accused. By referring to various, Ld. Advocate has argued that main accused stand absolved of penal consequences, no question of imposition of penalty on the co-a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... s. Archana Wadhwa, Hon ble Member (Judicial). As I am not in a position to pursue myself to accept the same, I proceed to record a separate order. 5. The following are the facts and findings as per Commissioner s order which are relevant : (a) M/s. Amrit Laxmi Machine Works was a holder of an advance licence issued to them in November, 1996 enabling them import of 248 pieces of bearings valued at Rs. 9,22,110/- within the overall value of Rs. 50,05,468/- allowed for duty free import and they were required to export goods valued at Rs. 3,52,96,940/-. (b) There were certain amendments to the licence and M/s. Amrit Laxmi Machine Works imported two consignments in January, 1997 and August, 1998. Licencee discharged export obligation by February, 1997. Still there was balance value on the licence for Rs. 27 lakhs and the licence was not being utilized after August, 1998 by the said firm which was valid up to 21-5-1999. (c) One broker dealing in advance licences, by name, Shri Jitendra Vakharia and Shri Ashwin Mehta of M/s. Nippon Bearings Pvt. Ltd., Mohanlal H. Vora of M/s. Shalin Bearing Corporation were mainly instrumental in making a false representation to DGFT a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... aring Pvt. Ltd. 1,00,000/- 6. Shalin Bearings Corporation 1,00,000/- . No. Name of the appellant Amounts (Rs.) 1. Shri Manharlal H. Vora 1,00,000/- 2. Mr. Ashwin Shantilal Mehta 1,00,000/- 3. Nippon Bearing Pvt. Ltd. 50,000/- 4. Shalin Bearings Corporation 50,000/- 6. The proposed order of Ld. Member (Judicial) allows appeals of these persons on the ground that M/s. Amrit Laxmi Machine Works and its Director were granted immunity from penalties by the order of the Settlement Commission and relies on the judgments relating to Kar Vivadh Samadhan Scheme and a judgment of the Single Member Bench of the Tribunal. 7. At the outset, it is observed that Kar Vivadh Samadhan Scheme is a one time scheme, which is on a different footing from the provisions relating to Settlement of cases by the Settlement Commission. The nature of applicants, the nature of relief granted and the conditions governing the Kar Vivadh Samadhan Scheme are also significantly different from the scheme o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... cautioned them of the consequences and should have informed the department if the caution was not adhered by them. Such a finding only shows that at the most there was negligence on the part of CHA and its Director and therefore no penalty is warranted on these two appellants. Sd/- (M. Veeraiyan) Member (Technical) Dated 2-2-2007 DIFFERENCE OF OPINION 13. Whether the provisions relating to Settlement of cases under the Customs Act can be considered to be identical to Kar Vivadh Samadhan Scheme justifying invocation of case laws under the Kar Vivadh Samadhan Scheme? 14. Whether M/s. Amrit Laxmi Machine Works and its Director played main role in the fraud or the others, namely, Shri Manharlal H. Vora, Mr. Ashwin Shantilal Mehta, Nippon Bearing Pvt. Ltd., Shalin Bearings Corporation are the main persons in the crime? 15. Whether treating the appellants as mere co-noticees waiver of penalty should be granted on the ground that M/s. Amrit Laxmi Machine Works and its Director have obtained immunity from penalty by the order of the Settlement Commission. 16. Whether order proposed by ld. Member (Judicial) or Member (Technical) should be endorsed? .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rs of such dutiable goods in respect of which he admits short levy on account of mis-declaration or otherwise of goods, to the Settlement Commission to have the case settled and such application shall be disposed of in the manner hereinafter provided : Provided that no such application shall be made unless - (a) the applicant has filed a bill of entry, or a shipping bill, in respect of import or export of goods, [as the case may be, and in relation to such Bill of entry or shipping bill] a show cause notice has been issued to him by the proper officer; (b) the additional amount of duty accepted by the applicant in his application exceeds two lakh rupees :------------- 20. The expression case has been defined in the Section 127A in the following manner : - 127A(b). - case means any proceeding under this Act or any other Act for the levy, assessment and collection of customs duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before a proper officer or the Central Government on the date on which an application under sub-section (1) of Section 127B is made : Provided that where any appe .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... n made, as per Sec. 127J. (e) Settlement provisions do not refer to any co-noticee or co-accused or any other applicant who is not liable to pay duties of customs. 23. In the instant case, the case which was pending before the Commissioner who has passed the impugned order, was a show cause notice wherein the duty has been demanded from the importer M/s. Amrit Lakxmi Machine works and penal action was proposed against other co-noticees, under the provisions of Sec. 112 of the Customs Act. The final order of settlement passed by the Settlement Commission settled the case by determining the amount of duty payable and granted immunity to the importer and its director both from confiscation of goods as well as penal action. There is no finding in the said order of the Settlement Commission as to the liability of the imported goods to confiscation under Sec. 11. The director of the imported company was also accorded immunity as he had filed a separate application for grant of immunity in his capacity as a co-noticee. The appellants herein did not file any application before the Settlement Commission and they claimed that they were not even aware of an application having been filed b .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... , settlement mechanism provides for settlement of the entire case as a whole, the fact that only the person liable to pay duty can make an application for settlement does not mean that the case in so far as the remaining co-noticees can continue even after a final order of settlement has been passed in relation to the case. 25. In view of the above, I do not intend to go into the correctness or otherwise of the finding of the ld. Member (T) that the major role was played by the appellants herein and the importer had only played the subsidiary role. The question as to who played the main role is not relevant for the purpose of the present case. 26. The points of difference are therefore, are answered as under : - (a) While the provisions of KVS Scheme and those relating to settlement of cases under the Customs Act are not completely identical, the underlying objective in both the scheme is similar and it is for this reason that the case laws in respect of cases under KVSS including in the case of Onkar S. Kanwar do not become entirely irrelevant. (b) The question as to who played the main role is irrelevant for the reason that once the case is settled by the Settlement Commi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates