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2016 (11) TMI 681 - DELHI HIGH COURT

2016 (11) TMI 681 - DELHI HIGH COURT - 2017 (346) E.L.T. 549 (Del.) - Imposition of penalty - 100% EOU - mis-declaration of imported goods - Held that: - the tax arrears of the Directors and officers of a company can be proceeded with independently, if they do not join it in making an application. This case, however, it is not tax arrears which are in dispute but the penalty which is wholly dependent upon the findings that led to the tax arrears (which has not been settled by the company) in the .....

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Jr. Standing counsel ORDER S. Ravindra Bhat, J. ( Oral ) 1. The three individuals in this writ petition seek direction for the quashing of an order dated 07.01.1999 which imposes penalty upon them. The impugned order was made pursuant to a show cause notice issued to the Company Lesag HBB (India) Limited and the other three petitioners before the court. The show cause notice, inter alia, was that the petitioners are 100% Export Oriented Unit manufacturing and exporting electronic parts had indul .....

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ct, 1962 as these had been used as concealment for the non-declared 22,56,74,100 pcs. and also for their mis-declaration with regard to their value. However, I give M/s Lesag (HBB) India Ltd., Faridabad an option to redeem the said confiscated goods on payment of a fine of ₹ 4,00,000/- (Rupees four lakhs only) in lieu of confiscation under Section 125 of the Customs Act, 1962 within a period of three months from the receipt of this order. (ii) I order that the impugned goods are to be valu .....

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toms Act, 1962. (iii) I also hold that the following notices are liable for penal action under Section 112 of the Customs Act 1962 and impose the following amounts of penalty on them:- (a) M/s Legal (HBB) India Ltd. Faidabad ₹ 5,00,000/-(Rupees Five Lakhs Only) (b) Shri E. George Commercial Manager ₹ 2,00,000/-(Rupees Two Lakhs Only) (c) Shri J.P.Gupta, Senior Manager Rs,1,00,000/-(Rupees One Lakh Only) (d) Shri Jaspal Singh Rekhi, Import Manager ₹ 50,000/-(Rupees Fifty Thousan .....

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ccepted and an order was passed under Section 19(1) of the Finance (II) Act, 1998. The amount determined as payable under Section 88 of the Finance Act was ₹ 5,50,090/-. It is not in dispute that the said amount was paid. 3. In the meanwhile the other three petitioners who were working with the first petitioner company as its employees (as Import Manager, Commercial Manager and Senior Manager respectively) were sought to be proceeded in respect of the penalties imposed. They, therefore, ap .....

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Notice No. 35/1998 dated 30.11.1998. It is stated that as long as the liability of the company i.e. first petitioner was satisfied, it would be highly inequitable if the respondent proceed against the present petitioners who were mere employees. 5. Mr. Rai appearing on behalf of the respondents, on the other hand, urged that unless an application is moved by all noticees, under the scheme, the settlement recorded in respect of one of them - may be even the principal person involved, would not in .....

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clarifies that not only tax but the penalty imposed against the company was to a substantially higher degree than that against the present petitioners. Customs duty to the extent of ₹ 11,00,179.55 and penalty to the tune of ₹ 5 lacs was imposed upon the company. However, as regards the other petitioners only penalty on the finding of abatement was recorded. 7. In Onkar S. Kanwar (supra) Supreme Court, inter alia, observed as under: 12. We are unable to accept this submission. Under t .....

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y gives immunity in respect of matters covered in the declaration. The matter covered in the declaration by the Company is the "tax arrears" of the Company. the declaration by the Company admittedly does not cover the tax arrears of the Directors/Officers. Thus they get no immunity under Section 91 on the a settlement by the Company. 13. Mr. Vellpally next submitted that the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order, if read as a whole, makes it clear that the benefit o .....

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on expeditiously or not. He submitted that the object was to give benefit to all Directors/Officers of the Company. He submitted that the restricted interpretation would defeat the object. 14. We have heard the parties. In our view, a reading of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order shows that where a declaration had been made in respect of a tax arrear and where in respect of the same matter a show cause notice had also been issued to any other person, then the settlemen .....

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ce being in respect of same matter on which the show cause notice has been issued to the main declarant. Then the Order provides that a settlement in favour of the declarant will be deemed to be full and final in respect of other persons also. This Order has to be read as a whole. If read as a whole, it is clear that a settlement by the main declarant is to operate as full and final settlement in respect of all other persons on whom show cause notice was issued in respect of the same matter. Thu .....

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