9911796707
TMI Blog2007 (9) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant and co-applicant No. 1, 2, 3, 4 and 5 was held on 28-6-2007. During the hearing, the representative of the Revenue submitted that in the instant case, two co-applicants (viz., co-applicant No. 2 and 5) are absconders. 3.1 The Bench, vide Admission Order No.166/CUS/MGR/2007 dated 13-7-2007, observed that provisions of the Settlement Commission in Chapter XIVA of the Customs Act, 1962 do not bar an application from a COFEPOSA detenue or an absconder. Front sub-section (7) of Section 127C it is clear that an applicant can represent before the Settlement Commission himself or through a representative duly authorized in this behalf. It is, therefore, clear that an applicant's so called abscondance cannot be a bar co entertain his application by the Settlement Commission. If there is a case for levy, assessment and collection of duty, a Bill of Entry and a Show Cause Notice related to the Bill of Entry is also present along with a true disclosure of the duty liability then the case has to be admitted, howsoever be the fraudulent nature of the case. Howsoever, grave the manipulations may be, it could only culminate into a Show Cause Notice demanding duty and/or con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case in their application before the Commission which had not been adhered to in this case. It also submitted that co-applicant No. 2 never appeared before the investigating agency and has not co-operated in the investigation. The said co-applicant No. 2 has never been examined by DRI during the investigation, nor has he made any disclosure of his role in the offence. He is seeking immunity only on the plea that if the case against the main applicant is settled, his application may also be settled granting immunity to him from all charges. Even the veracity/authentication of the signature of the co-applicant No. 2 said to be signed in the application form cannot be verified/commented on by DRI as he had never appeared before DRI vis-a-vis the investigation in the case. The submission made in the application before the Commission may not be considered following the ratio laid down by the Settlement Commission, Additional Bench, Mumbai in the case of Sadik Sadruddin Chunara in its Final Order No. 38/2006-Cus. dated 5-5-2006 reported in 2006 (203) E.I..T. 324 (Sett. Commission), wherein it was observed : "Apparently therefore the deposition made by Shri Pravin Shah cannot be he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the applicant had mis-declared the goods exported as H Acid, a high value chemical as against actual goods, viz., potassium chloride, a low value item solely for the purpose of availment of DEPB benefit fraudulently to the tune of Rs. 38,60,053/- in 18 export consignments. The fact remains that it was a fraud committed by the applicant and the actual goods meant for exports were illegally diverted into local market for profit. It may be a fact that in the demanding paras of Show Cause Notice the DEPB amount of Rs. 38,60,053/- to be recovered from the applicant is not mentioned. However, the misuse of DEPB, inasmuch as how the noticee had committed the fraud, intention to abuse/misuse the DEPB Scheme and role of each noticee in the said fraud has been detailed and substantiated in the Show Cause Notice issued to them. 4.5 The Revenue further invited the attention of the Bench to the fact that the case before it made by the applicant under Section 127B of the Act is not for adjudicating the case under Section 122 of the Act but to make a settlement by an order under Section 127C(7), after hearing both the parties and considering the nature and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EC and DEPB licenses and erroneous availment of credit facilities thereunder. (2) The alleged violations are contained in para 30 of the SCN [pg 36], and the paras that follow. They may be enumerated thus, also setting out the admissions made by the applicant : (i) Allegation : The applicant misdeclared the goods exported by it as high value chemicals, whereas they were actually low value chemicals. On the basis of such misdeclared exports, the applicant obtained DEPB from the DGFT, which was subsequently cancelled by the DGFT itself. The DEPBs so obtained were sold by the applicant in the open market for profit, to parties named in Annexure B to the SCN. DEPB of Rs 38,60,053/- was claimed on the basis thereof. [paras 30A to C (ii) of the SCN-pg 36-37] Submission : There is no demand in the SCN for this amount. As such, there is no admission of this alleged liability by the applicant. Even otherwise, this duty cannot be demanded from the applicant, in view of the judgment of the Hon'ble Bombay High Court in C.C. v. Jupiter Exports, 2007 (213) E.L.T. 641 (Bom.), as the applicant is neither the importer of the goods in question, nor claims to be the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ex. & Cus., Nagpur v. Ankit Pulp & Boards Pvt. Ltd. reported in 2007 (209) E.L.T. 135 in support of these submissions. (c) He further submitted that proviso to Section 23(2) would also not act as a bar to exercise the right to relinquish the title to the goods for the following reasons : (i) The proviso to Section 23(2) was inserted vide Finance Act, 2006 only w.e.f. 18-4-2006. To make the duty payable on the goods imported prior to the date of insertion of this 'proviso', the Revenue cannot snatch away the substantive vested right of the Applicant to relinquish the title to the goods, which crystallized and accrued since the date of importation of the goods, by applying the amendment retrospectively. Reliance is placed on Section 6(c) of the General Clauses Act 1897, which reads as under - "6. Effect of Repeal : Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not, (c) affect any right, priviledge, obligation, or liability acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The subsequent cancellation of licence is of no relevance nor does it retrospectively render the import illegal. He, therefore, requested that the Applicant be allowed to relinquish the title to the goods with consequent benefits. The ownership of seized goods, on allowing the relinquishment of title to the goods, will rest with the Central Government and, therefore question of duty liability on these goods will not arise. II. Regarding issue of immunity from interest : He prayed for grant of immunity from interest, and submitted as under : (i) It may please be appreciated that the Notification no. 51/2000-Cus dated 27-4-2000 issued under Section 25(1) of the Act, under which the exemption was availed and the bond was executed by the Applicant, specifically provides for interest liability at a specified rate, and therefore in light of the judgment dated 8-9-2006 of a Division Bench of Hon'ble Madras High Court in the matter M/s. SLS Exports Pvt Ltd v. Customs & Central Excise Settlement Commission, Chennai in WP No. 18607 of 2005, the Hon'ble Commission had powers to grant immunity from in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the bond as contractual." "7. .....Therefore any interpretation which curtails or restricts the jurisdiction of the Settlement Commission should be avoided. It is well settled that in selecting out of different interpretations, the Court will adopt that which is just, reasonable and sensible rather than one leading to uncertainty. In the present case, the interest payment is due to non-fulfilment of export obligations under the notification. The notification is also a law relating to levy of Customs duty and interest liability has been created under this notification. Thus, the Settlement Commission has power with regard to the waiver of interest under the notification." (iv) The Hon'ble Bombay High Court in the matter Tanu Healthcare Ltd v. Union of India reported in 2007 (207) E.L.T. 641 referred the aforesaid decision of Single Judge of Hon'ble Kolkata High Court, while declining to reduce the interest @ 15% imposed by this Hon'ble Commission. However, it may please be appreciated that the aforesaid judgment of Division Bench of Hon'ble Madras High Court was not brought to the Notice of Hon'ble Bombay High Court. (v) &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cus dated 27-4-2000, and after considering and analyzing the judgment of Hon'ble Calcutta High Court, expressed its disagreement with proper and appropriate reasoning. This Hon'ble Commission may please exercise its judicial freedom in considering the conflicting views reflected by different High Courts and may adopt the one considered more appropriate to the facts of the instant case. (x) Since the Applicants have extended full co-operation in the Settlement Proceedings, he requested that complete immunity from interest may please be granted. (xi) Without prejudice, the Applicants in respect of the seized goods which are lying at port, and the title to which has now been relinquished by the Applicant, submit that no interest is payable on these goods as the same have not been cleared from customs, and moreover, since now, the title would rest with Central Government there would be no duty payable, consequently there would be no question of any interest. III. Regarding issue of immunity from Fine, Penalty and Prosecution In view of the full cooperation extended by the applicant, with the settlement proceedings, and full and true disclosu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted against these persons may act as a deterrent against their chance of indulging in similar prejudicial activities in future since this may adversely affect their financial backbone..." The said judgment of Hon'ble Supreme Court clearly shows that the payment of Customs Duty itself would act as deterrent. Moreover there is no allegation that this applicant has been found indulged in any prejudicial smuggling activities after issuance of the instant Show Cause Notice. It may please be appreciated that the fact of payment of duty liability, itself would act as deterrent. He further submitted that the co-operation extended in the Settlement Proceedings, and the aforesaid position as per the decision of Hon'ble Supreme Court, may please be considered, while deciding the issue of grant of immunities from penalty (under Customs Act) and prosecution (under Customs Act, and IPC). He prayed for complete immunity from penalty (under the Customs Act), and from prosecution under the Customs Act, 1962 and Indian Penal Code. (c) Maqsood Yusuf Merchant This applicant, who is brother-in-law of Yusuf Dhanani, was resident of Dubai at the relevant period. From Dubai, he was operating a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond India in the same manner as such acts have been committed within India. I should like to note that similar provisions under the Customs Act, 1962 are conspicuous by their absence. Therefore, on this legal question I hold that penalty on appellant C.K. Kunhammed is not sustainable under law and the same is accordingly set aside and his appeal allowed." The Applicant has been made a noticee in the Show Cause Notice despite the fact that there is no material to show any violation of Customs Act, 1962 committed by this Applicant. The allegations levelled against this applicant are based on non-existent and extraneous grounds. This applicant is not liable to any penalty whatsoever. He submitted that the co-operation extended in the Settlement Proceedings, and the aforesaid Statutory position as per the decision of Hon'ble Tribunal, may please be considered, while deciding the issue of grant of immunities from penalty (under Customs Act) and prosecution (under Customs Act, and IPC). He sprayed for complete immunity from penalty (under the Customs Act), and from prosecution under the Customs Act, 1962 and Indian Penal Code. Regarding Other Co-applicants : He submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... else took his instructions. He was available for investigations and also was detained under COFEPOSA. Shri Sarfaraz Dhanani who is the son of Shri Yusuf Dhanani and partner in M/s. Sana International and an absconder under COFEPOSA was aiding and abetting Shri Yusuf Dhanani and purely acted on the Directions of Yusuf. Even if he is caught now and interrogated after such a lapse of time he may not in all probability be able to throw any further light more than what Shri Yusuf Dhanani has brought out, thanks to the tutoring that he (Sarfaraz) must have received by this time. The incident is also of 2001 and in remote past. We also see even though some of the persons concerned were arrested, no criminal complaint seems to have been filed all these years which could have run concurrently with the COFEPOSA orders. Revenue could also not emphatically inform as to whether Sarfaraz and Maqsood have been declared as proclaimed offenders under the Criminal Procedure Code. The Revenue has also not verified as to whether the absconder's application is authentic or not. Mere doubt on the part of the Revenue is not enough. We have to accept the applications as the Revenue has not brought on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch order of clearance has been made and the goods are still under seizure. This plea was taken at the time of Admission Hearing also when they had pleaded that they have not yet made up their mind for relinquishing the title and pointed out that legally they are entitled to such abandonment of the goods and the Proviso inserted in Section 23(2) does not come in their way, but left it to the wisdom of in Bench. The Bench in its wisdom pointed out that they should make a clean breast in the spirit it of settlement and that the Bench did not consider their request tenable. The Applicant agreed and stated they have already paid up the duties in the spirit of settlement. Now they have contested the recoverability of duty on the ground of relinquishment of title to the goods. 8.5 We do not agree to this relinquishment of the title at this late stage before the Commission and that too, after issue of the Show Cause Notice. The goods are still under seizure. We, at the stage of admission itself, did not agree for the relinquishment of the title and sought from the applicant the duty on this score. It is also to be noted that the relinquishising of the title before home clearance coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission. The petitioner appears to have gone to the Apex Court due to differing decision given by different High Courts, on the jurisdiction of the Settlement Commission to vary the interest rates. We do not think we have to stay the interest in the case before us on the basis of the stay given by the Supreme Court in another case. It is not a stay in the applicant's case. The Apex Court could decide either way. A stay does not guarantee a favourable order to the petitioner. We are of the view that interest will have to be paid for the delay in payment of the duties in this case before us, but parital waiver of interest could be granted as the Hon'ble Supreme Court has stayed the interest as above referred to. 8.8 The applicants have pleaded for immunity from fine, penalty and prosecution on the ground of co-operation, payment of duties etc. 9.(a) The case before us is a case of fraudulent obtaining of licences and undue duty benefits by way of customs duty concessions. It is also a case of collectively conspiring to fraudulently evade the duty amounting to Rs. 4,54,822/- on imported consignment of DASDA imported vide Bill of Entry No. 517 dated 10-5-2001 by substitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-law Shi Yusuf Dhanani. This also a fact that a COFEPOSA order is still pending against him. His role has been only on the instructions of Yusuf Dhanani and though he is not the principal offender, no total immunity from penalty could be extended to Shri Merchant. Immunity from Prosecution also cannot be granted to him - without imposing conditions. White granting immunities from penalties, we also take note of the fact that the applicant has paid up duties of Rs. 7,64,224/- on goods on which they relinquished the title to the goods. A strong legal point was taken by them of their right and eligibility to relinquish even at this late stage. They had also cited recent case laws in this respect. But in the spirit of settlement they had deposited this amount. 13. We, therefore, settle the case on the following terms and conditions under Section 127C(7). For the sake of convenience, the Duties, Fines, Penalties are compositive. (a) Customs Duty is settled at Rs.12,19,046/-. (b) Interest : Interest @10% is to be paid for the delay in payment of duties. The interest is to be computed exclusive of the duty component of Rs. 7,64,224 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
