TMI Blog2013 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, if the Settlement Commission subsequently finds that it has been obtained by fraud or mis-representation of facts. - F. No. 4/Cus/NGG/ 2012-SC (MB), SA(C) 8/2012 and SA(C) 13/2012 - 68/CEX/NGG/2012 - Dated:- 4-7-2012 - S/Shri K.C. Singh, A.P. Varma, JJ. REPRESENTED BY : Shri Sujay N. Kantawala, Advocate, for the Assessee. Shri A.R. Somaiya, Appraising Officer, for the Department. [Order]. This order disposes of the applications filed on 10-1-2012 by Shri Navin Ghai (hereinafter referred to as the applicant ) and on 13-1-2012 by Shri Jaidev Kukreja (hereinafter referred to as the co-applicant under sub-section (1) of Section 127(B) of the Customs Act, 1962 (in short the Act ) for settlement of their cases arising out of show cause notice F.No. S/26-Misc-21/08/11B, dated 30-6-2011 issued by the Joint Commissioner of Customs (Import), New Customs House, Mumbai. The said applications were received in the secretariat of the bench on 10-1-2012 13-1-2012 and were registered as SA (C) 08/2012 and SC (C) 13/2012. BRIEF FACTS OF THE CASE AS PER SCN 1.1 Based on an intelligence pertaining to undervaluation as well as mis-classification, an import consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer submitted details of value of goods in the overseas market as Rs. 41,95,206/- on the basis of data retrieved from internet and claimed that the price was from website for single unit or returnable basis. The applicant claimed to have got exceptionally high discount due to trade nearing expiry date. However from the scrutiny of packing slips Bill of Entry it was noticed that more than 90% of the goods were well within expiry dates and in no case applicant could have got expiry discount. On the basis of the suppliers price list, the value of impugned worked out to be Rs. 30 Lakhs Approx. If 20% trade and expiry discount was considered then also FOB value worked out to Rs. 24 Lakhs. 1.6 The MRP on the basis of market enquiry worked out to Rs. 64,65,600/-. The Assessable value works to Rs. 22,27,399/- which is somewhat similar and close to the value submitted by the applicant vide its letter mentioned above. 1.7 In his statement dated 11-1-2008, Shri Navin Ghai (Importer) has stated that he was proprietor of M/s. Ganapati SRJ Associates and handled its affairs. He had obtained IEC from DGFT, New Delhi in the above name and subject consignment of whey protein was his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability towards the import of subject consignment was taken by Shri Jaidev Kukreja. The import took place with full knowledge and connivance of Shri Navin Ghai. Shri Jaidev Kukreja financed the import of subject consignment, which was undervalued to evade the customs duty thereon. From the chart prepared on the basis of market enquiry, it appeared that Shri Navin Ghai and Shri Jaidev Kukreja had wilfully under valued the goods to evade levy of appropriate duty of customs. Shri Jaidev Kukreja played an active role in facilitating the importer to evade the customs duty by way of undervaluing and wilfully misclassifying the goods to avoid MRP based CVD. 1.11 A show cause notice dated 30-6-2011 was issued to Shri Navin Ghai, Proprietor of M/s. Ganapati SRJ Associate and Shri Jaidev Kukreja, financier of the said import goods asking them to show cause as to why; (1) The transaction value in terms of Rule 3(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 of the goods should not be rejected under Rule 12(2)(iii)(b) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and value be determined in terms of Rule 7 of the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC (Appeals), Trichy (ii) 1997 (94) E.L.T. 217 in the case of CC, Calcutta v. Star Enterprises (iii) 2004 (168) E.L.T. 72 (Tri.-Chennai) in the case of Opus Asia Technologies v. C.C., Chennai 2.4 The applicant has incurred detention and demurrage charges amounting to Rs. 1.90 lacs approximately. The applicant craves leave to refer and rely upon the same when produced. In view of the aforesaid judgments, the Margin of Profit will be reduced to NIL or in minus territory, hence there is no question of imposing Redemption Fine on the impugned goods. 2.5 The applicant has submitted that he has acted in a bona fide manner and has made full disclosure and has fully co-operated with the investigation proceedings and deposited the duty amount during the investigation proceedings, therefore a lenient view may be taken as regards penalty sought to be imposed under Section 112(a)/114A of the Act on the applicant. The applicant also relied upon on the order No. 71/Final Order/Cus/GRG/2010, dated 29-9-2010 passed by the Hon ble Settlement Commission in the case of Maytas Infra Pvt. Ltd. in this regard [2011 (270) E.L.T. 459 (Sett. Comm.)]. 2.6 The applicant has further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epancies and defects in the applications of the applicant co-applicant have been rectified. He also submitted that the applications fulfil the criteria as laid down under Section 127B of the Customs Act, 1962. The advocate of the applicant co-applicant in his further letter dated 13-2-2012 further submitted that, as the adjudication order in their case has been passed on 12-2-2012 during the pendency of the Settlement application, the same is non-est. He relied upon the case of Ahmad Imran reported in 2007 (207) E.L.T. 622 (Sett. Comm.) and Gabrial India Ltd. reported in 2004 (166) E.L.T. 285 (Commr. Appl.). 4.4 The application of the applicant co-applicant were deemed to have been allowed to be proceeded with under the provision to Section 127C(1) of the Customs Act, 1962 vide order dated 13-3-2012 of the Hon ble Bench on file. JURISDICTIONAL COMMISSIONER S REPORT 5.1 Jurisdictional Commissioner of Customs, vide letter dated 27-4-2012 submitted that the adjudication order has been passed before the period of 14 days from date of issue of the notice of proceeding with the application, within which, order of allowing or rejecting the application under Section 127(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re duly acknowledged by the department. The ld. Advocate expressed surprise that inspite of above evidence, the department is claiming that it was not intimated of the fact of approaching the Settlement Commission by the applicant. The ld. Advocate, relying upon the decision of Settlement Commission in the case of Ahmed Imran reported in 2007 (207) E.L.T. 622 (Settlement Commission) stated that the order passed by the adjudicating authority in this case is non-est and therefore the application filed by the applicant and the co-applicant before this Hon ble forum is entertainable. 6.3 Coming to the facts and merits of the issue, he reiterated the submissions contained in the applications and pointed out that the value of the impugned goods declared by the applicant in the B/E is a negotiated one and is true and correct. However, because of the insistence of the department, the applicant has accepted the assessable value arrived at by the department on the basis of market enquiry and has paid differential Customs duty along with applicable interest in the spirit of settlement of the case. Therefore immunity from fine, penalty and prosecution may be granted to the applicant as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission, it is the plea of the department that the application cannot be taken for settlement. 7.4 This kind of plea has been considered by the commission in some earlier cases. The commission has been going by the judgment of Hon ble High Court of Delhi in the case of Qualimax Electronics Pvt. Ltd. v. Union of India - 2010 (257) E.L.T. 42 (Del.). Following paragraph of the said judgment are relevant in this regard. 31. The real issue is whether on the date of settlement applications were made the case had already been adjudicated or not. It is also a jurisdictional issue for the Settlement Commission. Because, the Settlement Commission can only proceed to settle a case which is pending adjudication of the date the settlement application is received by it. The date of receipt of the order by the applicants is inconsequential. 32. Of course, there is the danger that to prevent an assessee from seeking a settlement of his case, the adjudicating authority may quickly pass the adjudication order the moment he gets an inkling that the assessee is about to approach the Settlement Commission. There is also the danger that the adjudicating authority may back date an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting authority had already been adjudicated . 7.5 In the case under settlement, the applicant (Shri Navin Ghai) had actually filed the application for settlement on 10th January, 2012 and Revenue was duly informed about the same by the Advocate. The letter of the advocate was having a photocopy of the covering letter submitted to the commission, which clearly indicated that the application filed by Shri Navin Ghai had been duly received in the settlement commission office on 10-1-2012. 7.6 In view the above circumstances, the bench finds it a clear case of attempt by adjudicating authority to deny legally available remedy of settlement to the applicant (Shri Navin Ghai), despite having the knowledge that the noticee had filed an application before Additional Bench, Mumbai on 10-1-2012. Therefore, the bench has no hesitation in declaring adjudicating order dated 12-1-2012 passed by Joint Commissioner of Customs as non-est in the eyes of law and take up this case for settlement. 7.7 Undisputed facts in this case are that M/s. Ganapati SRJ Associates, New Delhi of which Shri Navin Ghai, was Proprietor, imported Whey Protein vide Bill of Entry dated 12-12-2007 in which declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sixty Thousand Six Hundred Sixty Only) towards statutory interest. The applicant is directed to work out statutory interest payable on the settled differential duty amount and pay the difference, if any, as part of the settlement of this case. Fine : The goods, which were provisionally released, are held liable to confiscation under Section 111(m) of the Customs Act, 1962. The bench fixes an amount of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand Only) towards redemption of the goods under Section 125(1) of the Customs Act, 1962. The bench grants immunity from redemption fine in excess of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand Only). Penalty : The bench imposes a penalty of Rs. 20,000/- (Rupees Twenty Thousand Only) to Shri Navin Ghai, Proprietor of M/s. Ganapati SRJ Associates, New Delhi. Further, the Bench imposes a penalty of Rs. 50,000/- (Rupees Fifty Thousand Only) on Shri Jaidev Kukreja under Section 112(a) of the Customs Act, 1962. The Bench grants immunity to S/Shri Navin Ghai and Jaidev Kukreja in excess of above mentioned amounts. Statutory interest, redemption fine and penalty should be paid by Shri Navin Ghai/Shri Jaidev Kukreja within 30 days of recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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