TMI Blog2018 (2) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... ortion of drawback for the Cenvat availed goods for the period from 2011-12 (Oct, 2011) to 2015-16. The applicant has made true and full disclosure of the liability before the Bench and also co-operated in the proceedings before the Bench and investigations conducted. The Bench thus holds it a fit case to settle the ineligible duty drawback at ₹ 20,01,721/- and the interest thereon at ₹ 3,66,965/-. Applicability of provisions of Section 113 of the Customs Act, 1962 - Held that: - The’ physical availability of the goods is necessary only for ordering confiscation which is different from holding the goods liable for confiscation. However in the instant case, Bench is not going into the question of confiscation of the exports made. It is a settled law that the goods can be held liable for confiscation if the commission or/omission of the importer or exporter have rendered the goods liable for confiscation. Demand of interest - Held that: - The interest liability is settled at ₹ 3,66,965/-. As the applicant has already paid the said amount as confirmed by the Revenue, the same is appropriated and adjusted towards the interest liability and no further liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1995 and provisions of contemporary drawback notifications. 1.4 The officers of DRI, Tuticorin and Madurai, visited the applicant firm and scrutinized the documents with reference to the purchase of raw materials and drawbacks benefits availed by them. Scrutiny of the documents revealed that they were regularly exporting printed books and colouring books and for manufacture of these products, the applicant procured paper and paper boards without payment of Duty under Annexure-1 of Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001 issued under Rule 19(2) of Central Excise Rules, 2002. 1.5 It was found that the applicant were procuring raw materials on payments of Excise duty for the manufacture of printed Diaries, Ruled/ Un-ruled/ Printed Exercise books, Single/Multi-coloured printed books and printed colouring books, etc., for which they had availed higher rate of Duty drawback as they were not availing the CENVAT credit. The applicant firm was also importing uncoated printed paper, Ivory papers Boards and coated Art paper in the Advance Authorisation Scheme. 1.6 Further the applicant had manufactured the said products utilising the non-duty paid raw materials procur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had happened inadvertently without any intention and they were ready to pay back the ineligible duty drawback amount received. The applicant had paid the ineligible drawback amount availed in respect of 48 Shipping Bills along with interest through two demand drafts for an amount of ₹ 18,79,092/- [Ineligible Duty Drawback] and ₹ 2,95,193/- [Interest] drawn in favour of Commissioner of Customs, Tuticorin and the same was credited into Government Exchequer. Subsequently, the applicant paid voluntarily an amount of ₹ 1,27,465/- towards ineligible drawback amount claimed vide 7 Shipping Bills along with the interest amount of ₹ 72,316/- which was credited into Government Exchequer. 1.9 Shri J. Manikandan, Partner, M/s. Team Cargo Services, Tuticorin (CHA Licence No.CHNR46/2009, registered at Chennai) in his voluntary statement dated 6-4-2016 inter alia deposed that they have filed certain Shipping Bills claiming higher rate of drawback without verifying the procurement details. He admitted that it was a mistake and had happened inadvertently and not with any intention and requested to take a lenient view. 1.10 M/s. Lovely Offset Printers Private Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been availing duty drawback under Customs, Central Excise and Service Tax Drawback Rules, 1995 from 1-10-2011 after the closure of DEPB Scheme. * The applicant had exported goods through 2501 Shipping Bills from the year 2011-12 to 2015-16, inadvertently they had claimed higher rate of drawback in 55 Shipping Bills. * That ARE 1/ARE 2 filed along with the Shipping Bills, they have mentioned that the goods were manufactured availing CENVAT credit on raw materials; and only in very few shipping bills it had been left out by the Custom House Agent. * The mistake had happened only in 2.19% of Shipping Bills which is very minimum and negligible. * The amount of erroneous claim of higher rate of drawback of ₹ 18,79,092/- along with interest of ₹ 2,95,193/- was paid immediately on being pointed by DRI even before deposing the statement on 20-7-2015. the applicant ton their own verified and detected further erroneous drawback claim of ₹ 1,27,465/ - in 7 Bills and paid the amount voluntarily along with interest of ₹ 72,316/-. * The voluntary detection and payment of erroneous drawback claim and declaration in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct under his active involvement in the alleged offence committed by the Private Limited Company. Hence, the proposal to impose penalty jointly and/or severally on the company and the Director is not sustainable under law. Admissibility of the application 3.1 The applicant, M/s. Lovely Offset Printers (P) Ltd., had filed settlement application before the Additional Bench of Settlement Commission, Chennai on 7-3-2017. The application was numbered S.A. CUS/06/2017-SC and allowed to be proceeded with by the Bench on 23-3-2017 in accordance with Section 127C of the Customs Act, 1962. Report of the jurisdictional commissioner 4.1 The jurisdictional Commissioner vide his report C.No. VIII/17/25/ 2017 Legal dated 25-4-2017, inter alia, stated that : * The applicant has contested that the goods already exported are not liable for confiscation under Section 113 and hence penalty cannot be imposed under Section 114(iii) of the Customs Act,1962, unless the goods are confiscated and also quoted several case laws defending their claim. In this regard it was clarified that Section 113(ii) of the Customs Act, 1962 mandated that the export goods shall be liable for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly exporting Printed Diaries, File Folders, Exercise Books, Colouring Books, Single/Multi-coloured Printed Books, etc. under the Duty Drawback Scheme, Director of the company should have been fully aware of various incentive schemes provided by the Government. * It is the responsibility of the Director to monitor the exports and he has not disclosed the facts and not repaid the ineligible amount of drawback at any point of time till the verification of the documents was carried out by DRI. This misuse of Duty Drawback Scheme would have continued but for the verification conducted by DRI. 4.2 The jurisdictional Commissioner has further submitted that the applicant had paid the admitted differential duty demanded in the SCN to the tune of ₹ 20,01,721/- along with applicable interest liability of ₹ 3,66,965/-. Hearing 5.1 This case was heard on 18-7-2017. Shri B. Ganesan, Consultant and Shri A.A. Jegatheesan, General Manager and Shri G. Nageswaran, Manager-Export represented the applicant and Shri K. Panneerselvam, Senior Intelligence Officer, DRI Chennai represented the jurisdictional Commissioner. 5.2 It was submitted by the learned Consultant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department ignored these provisions and issued Show Cause Notice. 5.6 He further argued that the Notice has been issued jointly and severally demanding the Drawback and also proposing penalty and hence, they have not filed separate application for the Director; that if the Bench so directs they will files separate application for Shri K. Selvakumar, Director; that in view of the grounds mentioned in their application and the arguments made today, it was prayed that no penalty is imposable either on the Company or on the Director; that as they have paid the entire Drawback along with the interest, the case may be settled, based on the submissions in the application and they may be given complete immunity from prosecution and penalty. The Bench considered and agreed with the submission of the Consultant that no separate application need to be filed in respect of Shri K. Selvakumar, Director of the Company, as the Notice has been issued jointly and severally to both the Director and the Company. 5.7 The Departmental Representative reiterated the contents of the jurisdictional Commissioner s report C.No.VIII/17/25/2017-Legal, dated 25..2017 and confirmed the payment of entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinized their records and found out that a similar mistake had happened in respect of 7 more Shipping Bills and paid the Drawback amount of ₹ 1,27,465/- along with the interest of ₹ 72,316/- on 21-12-2015. The impugned SCN No. 53/2016, dated 21-12-2016 was issued demanding the ineligible duty drawback claimed and received amounting to ₹ 20,01,724/- along with applicable interest and also proposing appropriation of the amounts paid. 6.4 As such, the applicant has made true and full disclosure of the liability before the Bench and also co-operated in the proceedings before the Bench and investigations conducted. The Bench thus holds it a fit case to settle the ineligible duty drawback at ₹ 20,01,721/- and the interest thereon at ₹ 3,66,965/-. Fine and Penalty 6.5 The impugned SCN among other things proposes for confiscation of the goods exported vide Shipping Bills mentioned in Annexure B and C to the SCN under Section 113(ii) of the Customs Act, 1962 and penalty under 114(iii) of the Customs Act, 1962 on the applicant, Shri K. Selvakumar, Director of the applicant firm, M/s. Team Cargo Services, Customs Broker, Tuticorin and Shri J. Manikan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hipping Bills and higher rate of drawback in respect of duty free raw materials has been claimed only in respect of 48 Bills pertaining to the period May, 2014 to December, 2014. The applicant in their application stated that on their own detected claiming of drawback for Cenvat availed raw materials for 7 shipping bills. It is pertinent to note here that in the ARE 1/ ARE 2 filed along with the Shipping Bills, the applicant had mentioned correctly that they had been permitted to work under Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001. But in the Shipping Bills they had omitted this fact inadvertently. It was also noticed that the applicant paid the excess claimed drawback amount voluntarily along with applicable interest. It is also seen by the Bench that the applicant has filed 668 Shipping Bills for the year 2014-15 and the error has occurred only in 48 Shipping Bills wherein ineligible duty drawback had been claimed to the tune of ₹ 18,79,092/-. The very fact that the applicant on their own checked all the claims of drawback and further detected erroneous drawback claim in 7 Shipping Bills pertaining to the period 2011-12 to 2014-15 and paid an amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for the duty, interest and penalty. For the reasons stated above, the Bench refrains from imposing any penalty on Shri J. Selva Kumar, Director of M/s. Lovely Offset Printers, Sivakasi, as well. Order 7.1 In the light of the above, the Bench settles the case under Section 127(5) of the Customs Act, 1962 on the following terms and conditions : i. Duty Drawback : The Additional differential amount of Duty-Drawback in this case is settled at ₹ 20,01,721/- (Rupees twenty lakh one thousand seven hundred and twenty one only). As the applicant has already paid the said amount as confirmed by the Revenue, the same is appropriated and adjusted towards their liability and no further liability subsists in this regard, ii. Interest : The interest liability is settled at ₹ 3,66,965/- (Rupees three lakhs sixty six thousand nine hundred and sixty five only). As the applicant has already paid the said amount as confirmed by the Revenue, the same is appropriated and adjusted towards the interest liability and no further liability subsists in this regard. iii. Fine Penalty : Taking into account the facts and circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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