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2016 (4) TMI 407 - CESTAT NEW DELHI

2016 (4) TMI 407 - CESTAT NEW DELHI - 2016 (344) E.L.T. 449 (Tri. - Del.) - Demand of duty - Time barred - Denial of exemption under Notification No. 84/97-CUS dated 11/11/1997 - Import of goods for setting up of a co-generation power plant - Goods are not eligible for concession under the said notification as the certificates are not proper and genuine bearing forged signature of the competent officer - Held that:- on being informed by the Investigating Officer about forgery and illicit nature .....

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ds are concerned. Therefore, by referring Honíble Supreme Courtís decision in CC (Preventive) vs. Aafloat Textiles (I) P. Ltd. [2009 (2) TMI 75 - SUPREME COURT], since fraud was involved, in the eye of law such documents had no existence. Since the documents have been established to be forged or fake, obviously fraud was involved and that was sufficient to extend the period of limitation. - Confiscation of goods in lieu of redemption fine - Impugned goods were neither seized nor released on .....

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role of the importer has to be seen in the factual context. Since, wrong claim of exemption will attract provisions for confiscation of goods, penalty under Section 112 will get attracted on OCIL. - Imposition of penalty - Section 112(a) & 114A of the Customs Act - Held that:- act of collusion, willful mis-statement or mis-representation are not proven so the penalty under Section 114A cannot be imposed on the importer (OCIL). ICICI Bank Ltd as are not involved in the act of forgery and hav .....

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eals filed against the same order-in-original dated 31/03/2010 passed by Commissioner of Customs, ICD-New Delhi. Two appeals are by the Revenue and one appeal is by M/s. Orient Ceramics and Industries Limited (appellant importer). 2. The brief facts of the case are that the appellant importer (OCIL) had imported goods for setting up of a co-generation power plant. They have claimed exemption for the said import under Notification No. 84/97-CUS dated 11/11/1997 as amended. The appellant-importer .....

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Certificate (PIAC) required for claiming the said exemption was a fabricated/forged document. Accordingly, proceedings were initiated against OCIL to deny the exemption and to impose penalties. The proceedings concluded through the order passed by the Learned Commissioner. He decided in a combined order both the imports made by OCIL through JNPT and ICD, Tughlakabad. For imports through JNPT he denied the benefit of the above mentioned notification to OCIL; ordered confiscation of imported goods .....

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nd allowed their redemption of payment of fine of ₹ 30 lakhs; confirmed customs duty payment of ₹ 1,84,66,713/-; imposed penalty of ₹ 5 lakhs on OCIL; imposed penalty of ₹ 40 lakhs each on Shri Nanda Kumar and Shri Rakesh Yadav. 4. The Revenue is in appeal against the above order of the Learned Commissioner against non-imposition of penalty equal to the customs duty under Section 114A of the Customs Act, 1962 on OCIL and non-imposition of penalty on ICICI Bank Ltd. under .....

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the impugned goods (c) The correctness of imposition of penalties on OCIL under Section 112 of the Customs Act, 1962. (d) Non-imposition of penalty under Section 114A of the Customs Act, 1962 on OCIL and under Section 112 of the Act on ICICI Bank Ltd. 7. The admitted facts of the case are that OCIL imported various items to set up a Co-generation Project in terms of the approval given by Ministry of Finance. The project was approved by the World Bank and ICICI Bank Ltd has agreed to provide fina .....

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tes submitted by the importer allowing the concession as per the said notification. Later, it was revealed that signatures of the Competent Authority in the Line Ministry were actually forged by some other official in collusion with an Agent who acted as a middle man for OCIL to obtain these certificates. 8. We have carefully perused the impugned order. The admitted fact is that the goods are not eligible for the concession under the said notification as the certificates are not proper and genui .....

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oncession on the goods cannot be claimed based on forged documents irrespective of who is responsible for such forgery. Submission of such forged document for claiming exemption is a clear case of mis-statement. OCIL s plea that they are not involved in the forgery and hence, there is no willful mis-statement on their part cannot be accepted in so far as the correct duty liability on the imported goods are concerned. Here, we may refer to Hon ble Supreme Court s decision in CC (Preventive) vs. A .....

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in terms of bond executed by the importer. No redemption fine can be imposed in a situation, where neither the goods are in the custody of the department nor they were provisionally released under the proper bond. As such, we find imposition of redemption fine on the goods which were never available for confiscation is not legally sustainable. In a similar situation, the Larger Bench of the Tribunal in Bhagyanagar Metals Ltd. - 2016-TIOL-454 CESTAT-HYD-LB also held that in case where there is n .....

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ed any bond for provisional release of any goods in terms of Section 110A of the Customs Act, 1962. He further submitted that the bond mentioned by the Original Authority in his order dated 18/8/2006 is for the clearance of goods on payment of provisional duty. In the present case in the absence of any seizure thereafter provision release of goods under bond, confiscation or imposition of redemption fine are not sustainable. We find that reliance placed by Revenue on the decision of Honble Supr .....

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d. reported in 2008 (229) E.L.T. 185 (P&H)=2008-TIOL-280-HC-P&H-CUS held:- :12. It may also be noticed here that in the case of M/s. Weston Components Ltd. Vs. Commissioner of Customs, New Delhi (supra), the goods were released to the assessee on an application made by it and on the execution of a bond by the assessee and in those circumstances, the Hon ble Apex Court held that the mere fact that the goods were released on the bond being executed would not take away the power of custom a .....

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decision cannot be understood that in all cases the goods were permitted to be cleared initially and later proceedings were taken for under-valuation or other irregularity, even then redemption fine could be imposed. We are, therefore, not inclined to accept the contention raised by the appellant on this issue and set aside the redemption fine. 13. The reliance of learned counsel for the revenue upon the provisions of Section 125 of the Act is also mis-conceived. Section 125 of the Act is applic .....

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earned Counsel pleaded that the fine is payable, if at all, only on redemption of goods. Here there is neither a seizure nor provisional release under bond and, hence, the question of payment of redemption fine either to release the goods or in terms of the bond does not arise. We find that there can be no redemption fine in the absence of any seizure or provisional release of such seized goods under proper bond. In the present case in the absence of such events, redemption fine imposed is not s .....

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d this issue in detail. 12. While concluding that OCIL themselves are not involved in the forgery of these certificates and hence, not liable for equal penalty under Section 114A, the Original Authority observed that they are liable for penalty under Section 112. The Original Authority observed that the goods have become liable for confiscation in view of the irregular claim for exemption and hence, the penalty under Section 112 is attracted. While considering the penalty under the said section, .....

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Section 112 on OCIL. Regarding non mentioning of Section 112 in the show cause notice, we take note of the detailed allegations made in the same. In the facts and circumstances of the case the notice originally proposed demand of duty, confiscation of goods and penalty under Section 114A. In the present case we find while the goods were found to be not eligible for concession, in view of forged certificate, the role of the importer has to be seen in the factual context. Since, wrong claim of ex .....

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ission of the statutory breach is itself the offence. Similar type of offences based on the principle of strict liability, which means liability without fault or mensrea, exist in many statutes relating to economic crimes as well as in laws concerning the industry, food adulteration, prevention of pollution, etc. in India and abroad. Absolute offences are not criminal offences in any real sense but acts which are prohibited in the interest of welfare of the public and the prohibition is backed b .....

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the said findings of the Original Authority. 13. Regarding non-imposition of penalty under Section 114A on OCIL which is subject matter of appeal by Revenue, we find that OCIL were not involved in any manner in the forgery of the certificates. The Original Authority is correct in not imposing the said penalty. 14. Here, it is necessary to distinguish the confirmation of demand for extended period and imposition of penalty equal to the duty on the importer. Admittedly, the present case involves .....

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such exemption was not genuine. As such the duty which escaped assessment by presentation of the improper and forged document has to be paid by the importer. 15. Regarding the question of penalty on the importer, the same will stand in a different footing. Unlike duty which is on the goods, penalty is on the importer and it is necessary to show that the importer has rendered himself by his act of collusion, willful mis-statement or mis-representation liable for penalty under Section 114A. In the .....

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Though the expressions used in proviso to Section 28 (1) and Section 114A are similar the consequences of their application are not similar. One deals with duty demand and the other deals with levy of penalty. It is necessary for imposing penalty under Section 114A, the person liable to such penalty should be shown to be involved in collusion, misstatement etc. On careful perusal of the impugned order, we find that the findings of the Original Authority is based on correct appreciation of all m .....

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cerned authority would have no discretion in quantifying the amount of penalty. Here, in the present case the Original Authority found that the conditions stated in Section 114A are not applicable. We are in agreement with said findings. 16. Revenue also pleaded for imposition of penalty on ICICI Bank Ltd, for their role in the improper importation of the impugned goods. The Original authority has examined this issue in detail and categorically concluded that ICICI Bank Ltd. are not involved in .....

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