2002 (3) TMI 335 - Commission - Customs

Summary

Issues Involved:
1. Admission of applications filed by partnership firms for settlement of customs duty liability.
2. Determination of additional customs duty liability.
3. Adjustment of bank guarantee amount against duty liability.
4. Consideration of penalties for misdeclaration of goods' value.

Issue-wise Detailed Analysis:

1. Admission of Applications Filed by Partnership Firms for Settlement of Customs Duty Liability:
The applicants, comprising three partnership firms and their partners, filed multiple applications with the Settlement Commission seeking settlement of customs duty liabilities arising from various Bills of Entry filed between 1995 and 1997. The Commissioner of Customs had issued show cause notices demanding differential duty and proposing penal action against the firms and their partners. The Settlement Commission decided to dispose of all applications through a single order due to common facts and issues.

2. Determination of Additional Customs Duty Liability:
The applicants admitted the allegations made in the show cause notices and accepted the additional duty liability as demanded by the Revenue. During the hearing, the applicants' advocate confirmed the acceptance of the full differential duty liability and acknowledged the misdeclaration of the goods' value. The Settlement Commission observed that the applicants had satisfied the requirements of Section 127B read with Section 127C(1) of the Customs Act and allowed the applications to proceed under Section 120C(1). The applicants were directed to deposit the duty amount payable as per the show cause notices within 30 days of the receipt of the order.

3. Adjustment of Bank Guarantee Amount Against Duty Liability:
The applicants requested that Rs. 5,00,000/- already recovered by the department through encashing a bank guarantee be adjusted against their duty liability. The Revenue confirmed the encashment of the bank guarantee but later submitted an application stating that the bank guarantee was related to a provisional assessment of a Bill of Entry not covered by the show cause notices before the Commission. Upon examination, the Commission found the Revenue's contention factually incorrect and confirmed that the Bill of Entry was indeed covered by the show cause notice. Therefore, the Commission upheld the adjustment of the bank guarantee amount against the admitted duty liability.

4. Consideration of Penalties for Misdeclaration of Goods' Value:
The Revenue submitted that their investigations revealed evidence of suppressed invoices and misdeclared values, suggesting that the case warranted appropriate penalties. The Settlement Commission clarified that the issue of penalties would be considered at the stage of final disposal of the applications. Both sides were given the liberty to file further submissions as necessary for the final disposal of the case.

Conclusion:
The Settlement Commission admitted the applications for settlement, directed the applicants to deposit the remaining duty amount after adjusting the bank guarantee, and deferred the consideration of penalties to the final disposal stage. The applications were allowed to proceed under the relevant sections of the Customs Act, with both parties free to submit additional information for the final adjudication.