2002 (3) TMI 342 - Commission - Customs

Summary

Issues Involved:
1. Duty evasion by misdeclaration and suppression of value.
2. Confiscation of goods under Section 111(m) of the Customs Act, 1962.
3. Imposition of penalties under Sections 112(a) and 114A of the Customs Act, 1962.
4. Maintainability of the application for settlement.
5. Full and true disclosure of duty liability by the applicant.

Detailed Analysis:

1. Duty Evasion by Misdeclaration and Suppression of Value:
The Directorate of Revenue Intelligence (DRI) conducted searches on 23-5-1998, leading to the seizure of electronic goods valued at Rs. 2,90,30,170/-. Investigations revealed that the applicant had imported goods by suppressing and understating their value, using different invoices for customs authorities in the country of supply. The Show Cause Notice (SCN) demanded recovery of evaded customs duties amounting to Rs. 1,99,479/- for consignments through Calcutta and Rs. 1,06,98,708/- for consignments through Mumbai.

2. Confiscation of Goods Under Section 111(m) of the Customs Act, 1962:
The SCN proposed that the imported goods, including seized goods, be held liable for confiscation under Section 111(m) due to misdeclaration and suppression of value. Additionally, it suggested imposing appropriate redemption fines under Section 125 of the Customs Act, 1962, for goods not available for confiscation.

3. Imposition of Penalties Under Sections 112(a) and 114A of the Customs Act, 1962:
The SCN also proposed penalties under Section 112(a) for various offences, omissions, and commissions, and under Section 114A for offences related to duty evasion and misdeclaration.

4. Maintainability of the Application for Settlement:
The applicant filed applications for settlement, which were initially questioned for covering only part of the SCN. After being advised, the applicant filed an amended application covering all Bills of Entry. The Revenue objected to the application on grounds of maintainability, claiming it was an abuse of process and that the adjudication proceedings were ripe for disposal. However, the Commission found the application maintainable, as it complied with Section 127B(1) of the Customs Act, which allows an importer or exporter to approach the Settlement Commission with a full and true disclosure of duty liability.

5. Full and True Disclosure of Duty Liability by the Applicant:
The Revenue argued that the applicant had not made a full and true disclosure, as they disclosed Rs. 62,80,415/- against a total demand of Rs. 1,13,60,103/-. The Commission, however, found the applicant's disclosure compliant with Section 127B(1), which requires disclosure of duty liability not previously disclosed before the proper officer. The applicant had disclosed additional duty liability in excess of the amount assessed and paid at the time of clearance.

Conclusion:
The Commission admitted the application for settlement, allowing it to proceed under Section 127C(1) of the Customs Act. The applicant was directed to pay the admitted duty liability of Rs. 62,80,413/-, with Rs. 35 lakhs already deposited to be appropriated towards this liability. The balance amount of Rs. 27,80,413/- was to be paid within 30 days. The Commission clarified that the Revenue could continue proceedings against other noticees not covered by the application and any cause of action arising from imports not covered by the 32 Bills of Entry in question.