2003 (5) TMI 255 - AT - Customs

Stay/Dispensation of pre-deposit - BIFR - Penalty - Licence - Evidence - Statement - Retraction

Issues:
1. Waiver of deposit of duty and penalties demanded from Aafloat Textiles and other applicants.
2. Liability of duty on imported goods cleared with special imprest licenses.
3. Dispute on the demand being barred by limitation.
4. Failure to verify the genuineness of licenses used to clear goods.
5. Imposition of penalties on brokers supplying forged licenses.
6. Financial hardship claims by the applicants.
7. Imposition of penalty on an intermediary broker.
8. Admission of knowledge by a broker and retraction of statement.
9. Financial hardship claim by an individual involved in forging licenses.

Issue 1:
The judgment involves applications for the waiver of deposit of duty and penalties amounting to approximately Rs. 6.69 crores demanded from Aafloat Textiles and other applicants. The duty was demanded based on imported goods cleared with special imprest licenses, rendering them eligible for partial exemption from duty under Notification No. 117/94. The applicants claimed innocence, stating they purchased the licenses in the ordinary course of business and were unaware of their forged nature. The tribunal considered the financial hardships claimed by Aafloat Textiles and the ongoing proceedings with the Board of Industrial and Financial Restructuring, ultimately waiving the deposit of duty and penalties by the importer and staying their recovery.

Issue 2:
The liability to duty on the imported goods was not disputed, although there was a contention that the demand was barred by limitation. The tribunal acknowledged the absence of evidence to apply all factors specified in the proviso under Section 28(1) of the Act. Despite this, considering the ongoing proceedings with the BIFR, the tribunal waived the deposit of duty and penalty by the importer and stayed their recovery.

Issue 3:
The judgment highlighted the failure of the company and its employees to verify the genuineness of the licenses used to clear the goods. The tribunal noted the relationship between the brokers and the applicants, emphasizing the need for each applicant to deposit Rs. 5 lakhs due to the circumstances surrounding the acceptance of the licenses as genuine by Customs Officers.

Issue 4:
Penalties were imposed on brokers Mahendra Shah and Kamlesh Mehta for supplying forged licenses to the importer. The tribunal considered the statements made by Mahendra Shah under Section 108 of the Act, where he acknowledged the forged nature of the licenses he purchased. Despite a retraction of the statement, the tribunal found the explanations unsatisfactory and imposed financial deposits on the brokers.

Issue 5:
Financial hardship claims were made by various applicants, with the tribunal noting the absence of evidence supporting these claims. Deposits ranging from Rs. 10 lakhs to Rs. 50 lakhs were ordered based on the individual circumstances of the brokers and other involved parties.

Issue 6:
An intermediary broker, Rasiklal Mehta, faced a penalty of Rs. 25 lakhs. The tribunal considered his role and financial circumstances, ultimately waiving the deposit of the penalty imposed on him and staying its recovery due to insufficient grounds for the penalty.

Issue 7:
The judgment addressed the contentions of broker Atul Goradia, emphasizing the admission of knowledge contained in the statement and subsequent retraction. The tribunal directed a deposit of Rs. 10 lakhs by Atul Goradia due to the lack of evidence supporting financial hardship claims.

Issue 8:
Individual Rajesh Chopra faced a penalty and claimed financial hardship without evidence to support the claim. The tribunal directed a deposit of Rs. 30 lakhs out of the penalty imposed on him due to the lack of attempt to refute the findings of the Commissioner regarding his involvement in forging licenses.

Issue 9:
The judgment concluded by setting a deadline for all deposits to be made within a month and required compliance reporting by a specified date. Appeals were scheduled to be heard subject to compliance with the order.

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