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TMI Blog2024 (12) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... order denying the benefit of the exemption under the EPCG scheme to the machinery imported by all the manufacturers, demanded duty under section 28 of the Customs Act along with interest under section 28AB of the Customs Act, imposed redemption fines and imposed penalties on the manufacturers and personal penalties under section 114AA of the Customs Act on the individuals. 3. Aggrieved, appeals were filed by the manufacturers and individuals. When they were heard in 2017, the jurisdiction of the Commissioner of Customs (Preventive) Jodhpur who issued the SCN was in question. This Tribunal had remanded all matters to the Commissioner to decide the matters after final decision by the Supreme Court on the question of jurisdiction in the Special Leave Petition filed against the judgment of the Delhi High Court in Mangli Impex Limited vs. Union of India [2016(339)ELT 605(Del.)]. 4. Revenue had filed appeals before the Rajasthan High Court assailing the orders of this Tribunal remanding the matters to the Commissioner. In some cases, the High Court upheld the remand orders of this Tribunal and those cases have since been before the Commissioner to decide. In some other cases, inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty for use of false and incorrect material.-If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods." 12. A plain reading of the above section shows that a person shall be liable to penalty under this section if: (a) a person makes, signs, uses or causes to be made, signed or used any declaration, statement or document which is false or incorrect; (b) he does so knowingly or intentionally; and (c) such declaration, statement or document is in transaction of business for the purposes of this Act. 13. If it is established that the person had knowingly or intentionally made, signed, used (or caused to be made, signed or used) a false declaration, statement or document in the transaction for the purpose of the Customs Act, then, he shall be liable to penalty under section 114AA of the Customs Act. 14. Section 114AA of the Customs Act does not provide that the person shall be penalised but it only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sha Rikabdoss Bhavarlal vs. Collector of Customs, Mysore [2000 (125) E.L.T. 65 (Mad.)] as follows: "The third column says that if an offence under Item 8 is committed, the goods concerned ''shall be liable to confiscation". ".....The learned Government Pleader had to concede that the Customs Authorities have got the discretion either to confiscate or not in a particular case. In this very case reference has been made to two other cases in which in spite of an offence having been committed, the party in each case has been let off with a warning, and without the goods being confiscated. The language does necessarily imply that there is a discretion because the language is not "such goods shall be confiscated". On the other hand the language is "such goods shall be liable to confiscation". The Collector of Customs when acting under Section 167 obviously acting in a quasi-judicial capacity. When discretion is vested in such a quasi-judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment of confiscation. If there was a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policy (2009-2014) framed under it. EPCG is a scheme under which DGFT issues a licence which entitles one to import capital goods at NIL or concessional rate of duty and using the capital goods so imported, goods must be manufactured and exported of a certain value. 20. The case of the department against the manufacturers is that by mis-declaring the year of manufacture of the machinery to be imported, the manufacturers obtained EPCG licences from the DGFT which they then used to import machinery, manufacture final goods and fulfil the export obligation. The mis-declaration of the year of manufacture of the capital goods was discovered only on investigation. Since the EPCG licence was obtained through mis-declaration, the machinery so imported was not eligible for exemption from duty and therefore, duty is recoverable along with interest and penalties. 21. It needs to be noted that the case of the department is not that the nature of goods or year of manufacture was mis-declared in the Bill of Entry or under any declaration made under the Customs Act. The allegation is that in the application made to the DGFT for EPCG scheme [under the Foreign Trade (Development & Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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