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TMI Blog2016 (5) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... tom Act, 1962. The applications were received in the Secretariat on 15-7-2015 and assigned Application Nos. SA (C) 213-214/2015. 2.1 On the basis of intelligence that the applicant have evaded Special Additional duty ('SAD' in short) on goods which were imported through M/s. Arshiya International Limited (Arshiya' in short) Free Trade Warehousing Zone ('FTWZ' in short) and were used in their factory for manufacturing of PVC flooring, the officers of Directorate General of Central Excise Intelligence ('DGCEI' in short), Mumbai Zonal Unit ('MZU' in short), Mumbai initiated investigation on 24-1-2014 against M/s. RIL. 2.2 The investigations have revealed the following : * M/s. RIL had imported their raw material viz. PVC resin under various Bills of Entry for their own consumption and not for sale. * The importer's name mentioned on the Bill of Entry was M/s. Responsive Industries Ltd. and all the containers arrived at JNPT and then escorted to M/s. Arshiya, FTWZ for further Customs clearance and shipment to their factory. * M/s. RIL had not paid SAD as per Notification No. 45/2005-Customs, dated 16-5-2005 as RIL presumed that since goods were imported for own consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SAD exemption will not be available if the goods are cleared from SEZ/FTWZ for own consumption. 3.1 On completion of the investigations, the show cause notice was issued to RIL asking them to show cause to the Commissioner of Customs (Nhava Sheva-General), Mumbai Zone-II as to why :- (i) The extended period specified in the proviso to sub-section (4) of Section 28 of the CA, 1962 should not be invoked to demand the SAD due from them for the reasons stated above; (ii) The exemption claimed by them under Notification No. 45/2005-Cus., dated 16-5-2005 should not be denied to them; (iii) SAD amounting to Rs. 1,84,29,550/- (Rupees One Crore Eighty Four Lakhs Twenty Nine Thousand Five Hundred Fifty Only), not paid by them in respect of the imported goods as detailed in Annexure 'A' to the show cause notice should not be demanded and recovered from them in terms of proviso to sub-section (4) of Section 28 of the CA, 1962 and why the amount of Rs. 1,84,29,550/- paid by them during investigation should not be appropriated against the SAD payable; (iv) Interest at the appropriate rate on the said amount of SAD [mentioned at (iii) above] should not be char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is also on record that they have suppressed the facts from the department with an intention to evade the SAD liability and thereby rendered them liable for consequential penal action under the Customs Act, 1962. (iii) It can be seen from the Settlement Commission, Mumbai Bench's, Settlement Application No. F. No. 68/CEX/KNA/2015-SC (MB) SA (E)116/2015, F. No. 65/CUS/KNA/2015-SC (MB) SA(C) 113/2015 and F. No. 66/CEX/KNA/2015-SC(MB) SA(E)114/2015 all dated 29-4-2015 that M/s. RIL approaching Hon'ble Settlement Commission in a habitual manner. Since, M/s. RIL is a habitual offender for indirect taxes, it is felt that this present application with the Hon'ble Settlement Commission may be rejected in view of Section 127L of Customs Act, 1962. Applicant's prayer of immunity from imposition of fine, penalty deserves to be rejected. 7.1 The case was on 29-1-2016. The applicants were represented by Shri Sujay Kantawala, Advocate, Shri R.K. Patel, Manager and Shri S.R. Morab, Asstt. Manager and the Revenue was represented by Shri Santosh B. Bhosle, Superintendent, DGCEI, Mumbai. 7.2 Shri Kantawala submitted that issue was about applicability of SAD. During the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest and paid the same before issue of the show cause notice. Therefore, no penalty is imposable on them in the absence of any contumacious act and mala fide intention as held by the Apex Court in the case of Northern Plastics. 8.4 In view of the CBEC clarifications in F. No. 137/46/2015-Service Tax, dated 18-8-2015 which is applicable to all indirect taxes, no penalty is imposable on the applicant/co-applicant under the facts and circumstances obtaining in the instant case. Reference is also invited to the Apex Court judgments in R.K. Garg and Hoganas India to support the view that no penalty is imposable. 9.1 The Bench has carefully considered the material facts, oral and written submissions of the applicant/co-applicant and the revenue. As regards the objection of the revenue that the application is inadmissible because of the bar provided in the Section 127L, the Bench observes that the present application has been filed and received in the Commission on 15-7-2015, i.e., before order dated 18-8-2015 of the Bench imposing the penalties. Relevant portions from Section 127L are extracted below : "SECTION 127L. Bar on subsequent application for settlement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the instant case, the goods were for self-consumption and condition of the notification was not satisfied. As such the provisions of Section 111(o) get attracted rendering the liable to confiscation and the applicant/co-applicant liable to penalty under Section 112. The goods are not available for confiscation but the applicant/co-applicant are liable to penalty under Section 112. As there was no misstatement, fraud, etc., neither Section 114A nor Section 114AA is attracted. 9.4 As regards the quantum of penalty under Section 112, the Bench observes that the opening paragraph of the Board's circular confirms the claim of the applicant that there was confusion about the applicability of SAD. This fact will have a bearing on the quantum of penalty. 10.1 In view of the above findings, the Bench settles the case in terms of the following orders. Order Customs duty : Customs duty including EC and SHEC is settled at Rs. 1,84,29,550/-. As the applicant have already paid this amount, no further liability subsists on this count. Interest : Interest is settled at Rs. 38,60,394/-. As the applicant have already paid this amount, no further liability subsists on this count. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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