2003 (5) TMI 340 - Commission - Customs

Summary

Issues: Settlement application for failure to fulfill export obligation under advance licenses; Liability to pay customs duty, interest, and penalty; Immunities sought by the applicant.

Issue 1: Settlement Application for Failure to Fulfill Export Obligation under Advance Licenses
The judgment pertains to a settlement application filed by an applicant concerning the failure to fulfill export obligations under two advance licenses obtained from JDGFT, Bangalore. The applicant had imported raw materials but failed to export the required products, leading to an investigation by DRI officers. The impugned show cause notice proposed to deny customs benefits, demand duty payment, impose penalties, and adjust the duty from the amount already paid by the applicant.

Issue 2: Liability to Pay Customs Duty, Interest, and Penalty
During the settlement application and personal hearing, the applicant acknowledged the failure to fulfill export obligations and liability to pay customs duty. The applicant sought immunities based on their bona fides and argued against the chargeability of interest, citing relevant provisions of the Customs Act and EXIM Policy. The Revenue representative contended that the duty and interest were paid only after the investigation commenced, emphasizing the applicant's obligation to pay interest as per the EXIM Policy and legal undertakings.

Issue 3: Immunities Sought by the Applicant
The Settlement Commission analyzed the submissions from both sides and reviewed relevant records. Despite the applicant's efforts to regularize the situation with JDGFT before the investigation, the Revenue representative insisted on interest payment. However, the Bench observed that the applicant had made full disclosure, cooperated with the Commission, and demonstrated willingness to comply with the law. Consequently, the Bench held that the applicant was not liable to pay interest under the Customs Act, granted immunity from confiscation, fines, penalties, and prosecution under Section 127H of the Customs Act, subject to withdrawal if obtained through fraudulent means.

In conclusion, the judgment resolved the settlement application by fixing the duty liability, stating no further duty was due as the amount was already paid, and ruling out interest payment under the Customs Act. Immunities were granted to the applicant under Section 127H, with a caution against fraudulent means leading to potential withdrawal of immunities as per the provisions of the Customs Act.