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2016 (9) TMI 1011

er provisions of section 127B of Customs Act, 1962 - penalty proceedings dropped by settlement commission for these co-noticees - whether the immunity from penalty be available to the other co-noticees who did not approach the tribunal i.e., decision of tribunal be applied on other co-noticees? - Held that: - the decision in the case of SK Colombowala v. Commissioner of Customs (Import), Mumbai [2007 (7) TMI 514 - CESTAT, MUMBAI] is relied upon, where it was held that, the case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained and is set aside. - App .....

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Customs House Agent. 3. Proceedings against Shri Prafulchandra Kataria, who had since expired, were abated. Proceedings against Shri Nitin Majethia were dropped for want of any proposal in the show cause notice for imposition of penalty. Against the other three noticees, the proceedings were dropped on the ground that there was no evidence of direct linkage of these individuals in the admitted cash transactions relating to the imports. The adjudicating authority also relied upon the decision of this Tribunal in SK Colombowala v. Commissioner of Customs (Import), Mumbai [2007 (220) ELT 492 Tri.-Mumbai)]. The relevant portion of the relied upon order, following reference to third Member owing to difference of opinion, was that : 26. … .....

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he order of the Settlement Commission dated 31st May 2013 to illuminate the factual matrix. Further reliance is placed on the decision of the Hon ble High Court of Bombay in Yogesh Korani v. Union of India [2013 (159) ELT 3] which held: 22. Once it is held that the penalty levied upon M/s. Choice Laboratories and the Petitioner are based on independent and distinct causes of action and there is no settlement in respect of imported Clove Bud oil with which the Petitioner is concerned, then the alternative submission of Mr. Bulchandani that the levy of Penalty of ₹ 15,00,000/- is excessive and harsh, loses credibility. In the facts of this case, the Petitioner, a Chartered Accountant, has indulged in fabricating bogus documents and went .....

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gs against the respondent, viz., the decision in re SK Colombowala and reservation about its finality owing to pendency of appeal against the decision of the Tribunal in re KI International with the impact of its outcome clearly articulated by the Larger Bench in re Rajesh Associates [Misc. Order no. 42714/2015], exploration of the evidence linking the notices with the illicit import is secondary to the issue of continuance of proceedings.. 8. The decision of the Tribunal in re S K Colombowala was settled by reference to a third member with the majority holding, that co-noticees cannot be proceeded against once the main noticee has settled the demand before the Settlement Commission. The contrary decision, viz, that of the Tribunal in KI In .....

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upon to pay penalty out of same adjudication. Hon ble Supreme Court in the case of S.P. Chengalvaraya Naidu v. Jagannath reported in (1994) 1 SCC 1 laid down the law that the principle of finality of litigation cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax- evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal gains indefinitely. We have .....

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through the entire judgment, I find that the same was in respect of judgment or decree obtained by fraud and without disclosing the factual position. The Hon ble Court observed that decree obtained by non-disclosure of the release deed amounted to fraud on Court and hence decree liable to be set aside. The facts of the said decision of the Hon ble Supreme Court are entirely different from the facts of the instant case or the facts available in the case of S.K. Colombowala. The proceedings are under the Central Excise Act as regards imposition of penalty in terms of Rule 26 of Central Excise Rules. The question of obtaining any decree or order by mis-representing the facts of the case or by fraudulently representing the case, as was the case .....

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