2002 (12) TMI 307 - Commission - Customs

Issues Involved:
1. Alleged misdeclaration of imported goods.
2. Demand for differential duty.
3. Confiscation and penalty under the Customs Act, 1962.
4. Request for immunities under Section 127H of the Customs Act, 1962.

Analysis of the Judgment:

1. Alleged Misdeclaration of Imported Goods:
The main applicant, M/s. Wipro GE Medical Systems Limited, and its co-applicants were accused of importing complete CT/e scanners in SKD condition but declaring them as parts for manufacture of CT/e scanners to benefit from a lower tariff. The imported CT/e scanners were subject to a higher duty rate, whereas parts for manufacture enjoyed a concessional rate. The Directorate of Revenue Intelligence (DRI) investigated and issued show cause notices (SCNs) alleging misdeclaration to evade higher customs duties.

2. Demand for Differential Duty:
The SCNs demanded differential duties of Rs. 15,83,771/- for imports through Bangalore and Rs. 22,83,105/- for imports through Mumbai. The investigation revealed that the main applicant had placed orders for complete CT/e scanners but declared them as parts to save on costs. The main applicant did not contest the allegations or the evidence collected during the investigation and admitted the duty liability.

3. Confiscation and Penalty under the Customs Act, 1962:
The SCNs proposed to confiscate the goods under Sections 111(m) and 111(o) of the Customs Act, 1962, and to impose penalties under Section 112(a)(ii) of the Act. Interest under Section 28AB of the Act was also demanded. The main applicant admitted the duty and interest liabilities and requested settlement of the case.

4. Request for Immunities under Section 127H of the Customs Act, 1962:
The main applicant sought immunities from penalties and prosecution under Section 127H of the Customs Act, 1962, arguing that they had made a full and true disclosure of the duty liability, cooperated with the authorities, and paid the duty and interest. The Revenue opposed the grant of immunities, arguing that it would send a wrong signal and encourage duty evasion.

Settlement Commission's Decision:
The Settlement Commission acknowledged the main applicant's cooperation and full disclosure. It considered the objectives of the Settlement Commission, which aims to provide a mechanism for settling disputes and avoiding prolonged litigation. The Commission noted that the applicant had admitted the duty and interest liabilities and had paid the amounts during the investigation.

The Commission granted the following immunities under Section 127H(1) of the Customs Act, 1962:
- Immunity from fine in lieu of confiscation of the goods.
- Immunity from penalty and prosecution under the Customs Act, 1962.
- The bank guarantee executed at the time of provisional release was ordered to be returned to the main applicant upon collection of the balance interest, if any.

However, no immunity from interest was granted. The jurisdictional Assistant Commissioner/Dy. Commissioner was directed to calculate the interest due and make necessary adjustments. The main applicant was required to pay any additional amount, if necessary, and report compliance.

The immunities were granted with the condition that they could be withdrawn if it was found that any material particulars were withheld or fraudulent means were employed in obtaining the settlement. The attention of the main applicant and co-applicants was drawn to sub-sections (2) and (3) of Section 127H of the Customs Act, 1962.

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