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IN RE: FLEMINGO (DFS) PVT. LTD.

2007 (6) TMI 463 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,

Settlement of case - EXIM - Sale through duty free shop - Evidence - Onus of proof - Held that: - there is no evidence to prove the allegation with regard to the 3004 cash bills under dispute and there is no evidence to indicate that there was any departure from the regulations warranting demand of duty in respect of these sales - the case is settled in favor of applicant by imposing various conditions. - 57/2007-Cus - Dated:- 4-6-2007 - S/Shri Joseph Dominic, Dr. J. Sridharan, JJ. REPRESENTED B .....

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ms Act, 1962 for settlement of proceedings initiated against them under Show Cause Notice O.S.14/2006-DIU dated 10-1-2007 issued by the Commissioner of Customs (Imports), Custom House, Chennai-600 001. Shri Atul Ahuja, Director, Shri P.A. Ponnappa, General Manager of M/s. Flemingo (DFS) Private Ltd., Shri B.K. Senthil Kumar, and Shri J. Raveendran, employees of M/s. Flemingo (DFS) Private Limited, Shri V. Rajagopal, Driver and Shri John Williams, Manager of M/s. Flemingo (DFS) Pvt. Ltd., Chennai .....

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submitted that they completed their verification and would like to have the matter heard urgently as they were suffering great loss and extreme hardship in view of the pendency of these proceedings. 3. Accordingly, the matter was heard on 30th May, 2007. Shri Habibullah Basha, Sr. Advocate, Shri C. Mani Shankhar, Advocate and Shri Viren Ahuja represented the main applicants. Shri Anand Sashidharan, Advocate represented Shri P.A. Ponnappa, co-applicant and Ms. S. Sridevi, Advocate represent .....

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n the Show Cause Notice that the signatures of buyers on the 3004 sales bills did not tally with the signatures available with the Department. He stated that at the point of sale, it was not possible to verify the signature of each customer. The regulations issued by the Department under Facility Circular No. 6 dated 11-3-2005 did not require that the signature of every customer should be verified before any goods were sold to a customer. Further, the signatures in the customs declaration form w .....

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to the Customs. The declaration forms were not available with the duty free shops. Secondly, in duplicate copies of the bills, the signatures were not clear and cannot be tallied. 5. He submitted that when there was no requirement of such verification, the allegation that the signature did not tally was totally untenable. It is a normal practice in any duty free shop to enter the passport number and the name of the passenger and this was followed by the applicants in this case also. Further .....

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as 4.1, 4.4 and 4.5 of the Circular were all complied with. Under para 5.2, there was a requirement that the internal audit department of the Custom House should carry out checks regularly on the stocks and should verify the sales. During their various checks, no questions were raised and no allegations of forgery were made. Further, the regulations required that the goods sold from the duty free shops shall be delivered on board the ship under escort. There is no allegation that this was not do .....

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Under Section 114(e) of the Evidence Act when there is a regulation, its performance by the concerned officer has to be presumed. The performance of their duties by the bond officers is supported by the documents. The officers have certified in the escort reports that the goods have been placed on board. The applicants filed copies of escort reports and it has to be presumed that they are correct. 6. The onus to prove that the signatures did not tally was on the Department. A handwriting e .....

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re diverted to the local market. The learned Sr. Advocate cited the following decisions in support of his contention that the allegations cannot be made on the basis of presumptions and without tangible evidence :- (i) Oudh Sugar Mills Ltd. v. Union of India - 1978 (2) E.L.T. (J. 172) (S.C.); (ii) Durga Trading Company v Commissioner of Central Excise, Lucknow - 2002 (148) E.L.T. 967 (Tri.-Del) (iii) Commissioner v. Durga Trading Company - 2003 (157) E.L.T. A315 (S.C.) (iv) Kamar Ali & Sons .....

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ants, they may be granted immunities. 9. The representative of the Revenue stated that as per the facility circular, para 4.1, the applicants should have ensured that the full signature of the buyer was put on the cash bills. Further, the escort officers have already admitted that they were giving escort reports on a periodical basis. Besides this, the applicant cannot take shelter under the audit done by the Department because the violations done by them were beyond the scope of audit. He .....

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ures of the buyers. Therefore, the Department stated that the entire duty demand was correct and no immunity should be granted to the applicants. 10. We have considered the submissions on either side. We find that the dispute at present is with regard to the allegation that in respect of 3004 cash bills, the signatures of the buyers did not tally with the signatures available with the Department. Therefore, the investigation concluded that these bills were issued to non-eligible persons and .....

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mstance, they were not able to accept that the sales were effected to ineligible persons. 11. On examination of the allegations made in the Show Cause Notice and also the submissions of the learned Senior Advocate, we find that the Department has made allegations on the basis of visual comparison of the signatures on the bills with the signatures in the declaration forms available with the Department. This procedure has been objected to by the applicants. According to the applicants, the in .....

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ed with the signature available with the Department. In the normal course, at least a small percentage of these signatures should have been got verified by an expert before the allegation was made. Further, it is also noticed that the Department did not take the statements from any of these buyers whose signatures are under dispute. Here also, it may not have been possible to take the statements from all the persons, but at least, a few would have been sufficient to prove to a substantial degree .....

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ture on the bill. Merely alleging the mismatch on the basis of visual examination without any supporting documents or expert opinion would be unfair and untenable as contended by the applicants. It is particularly so in view of the fact that the applicants have complied with all the other requirements under the facility circular issued by the Department for the operation of the duty free shop. There is no dispute that all the details required as per the circular have been mentioned in the Bills. .....

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on the Department to prove it beyond doubt and the onus can be discharged only on the basis of concrete evidence and admission statements from the persons concerned or opinion from a technical expert. Even when there are variations in the signatures, a technical expert could have certified whether both the signatures belonged to the same person or not. 13. The Advocate has cited various decisions of the Supreme Court and the Tribunal saying that the Show Cause Notice issued without any tan .....

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age of justice. The applicants have also pointed out that they had placed the goods on board the various ships under proper customs escort. They have placed large number of such escort reports before us. It has been mentioned in the Show Cause Notice that the officers signed these escort reports periodically and actually, they did not accompany the goods. Here again, the documentary evidence is against these allegations. There is no doubt that the officers who certified the escort reports are th .....

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accordance with the guidelines issued by the Department. If there was any failure on the part of the Department, it cannot be held against the applicant company. As far as the applicant company was concerned, they were required to place the goods on board the vessel and to get such placement certified by the concerned officers. Since the applicants have complied with this requirement, the allegation do not appear to have any merit. This goes to show that all the sales under the disputed cash mem .....

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se circumstances, we hold that there is no evidence to prove the allegation with regard to the 3004 cash bills under dispute and there is no evidence to indicate that there was any departure from the regulations warranting demand of duty in respect of these sales. 15. In the light of the above, we hold that the total liability of the applicants is the amount admitted by them, viz., Rs. 82,25,502.45. The applicants have pleaded for various immunities including immunity from interest, fine, p .....

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