2002 (12) TMI 543 - Commission - Customs

Issues Involved:
1. Duty liability on unutilized and missing imported goods.
2. Determination of the relevant date for duty calculation.
3. Applicant's admission of duty liability and additional duty.
4. Immunity from penalty, fine, and prosecution.
5. Interest liability on the admitted duty.
6. Clearance of unutilized inventory.

Detailed Analysis:

1. Duty Liability on Unutilized and Missing Imported Goods:
The main applicant, M/s. Wipro GE Medical Systems Centre Limited, and the co-applicant, the Managing Director, faced proceedings due to discrepancies in duty-free imported goods. The SCN alleged that goods valued at Rs. 3,44,67,731.06 were not found physically, and goods worth Rs. 1,98,88,171/- were not utilized within the warehousing period, making them liable for confiscation under Sec. 111(j) & (o) of the Customs Act, 1962. The proposed duty demand was Rs. 2,53,57,559.60.

2. Determination of the Relevant Date for Duty Calculation:
The applicants cited the Apex Court's judgment in Keshavram Rayon v. Collector of Customs, Calcutta, to argue that the duty should be calculated based on the date of expiry of the warehousing period. This resulted in a reduction of the duty liability by Rs. 12,81,367.23, leading to a net admitted duty liability of Rs. 2,54,87,024.80.

3. Applicant's Admission of Duty Liability and Additional Duty:
Initially, the applicants admitted the duty proposed in the SCN. However, upon further verification, they acknowledged an additional duty liability of Rs. 14,10,832.43, raising the total admitted liability to Rs. 2,67,68,392.03. During the final hearing, they confirmed having paid Rs. 2,79,71,871/-, with Rs. 22,72,160/- pertaining to periods beyond the SCN, thus admitting a total duty liability of Rs. 2,56,99,711/-.

4. Immunity from Penalty, Fine, and Prosecution:
The Settlement Commission noted that the applicants had made a full and true disclosure of their duty liability and cooperated with the proceedings. Consequently, immunity from penalty, fine, and prosecution under the Customs Act, 1962, was granted to both the main applicant and the co-applicant. However, immunity from penalty and prosecution under all Central Acts was not granted due to the absence of specific references.

5. Interest Liability on the Admitted Duty:
The applicants expressed willingness to pay interest as determined by the Settlement Commission. The Commission observed inconsistencies in the applicant's prayers for immunity from interest. Given the applicants' awareness of the missing goods and the lack of adequate explanations, the Commission did not grant full immunity from interest. The main applicant was required to pay simple interest at 10% per annum on the admitted duty from the date of duty-free importation until the payment date.

6. Clearance of Unutilized Inventory:
The main applicant requested permission to clear unutilized inventory on which duty had been discharged. The Commission refrained from issuing a specific order, as the Revenue indicated that the goods were not under seizure, making the request irrelevant.

Conclusion:
The case was settled with the following terms:
1. The total duty liability was settled at Rs. 2,56,99,711/-, already paid by the applicant.
2. Immunity from penalty, fine, and prosecution under the Customs Act, 1962, was granted to both applicants.
3. The main applicant was required to pay 10% simple interest on the admitted duty, with immunity granted for interest exceeding 10%.
4. Immunities would be withdrawn if the interest was not paid within the specified period or if it was found that the settlement was obtained fraudulently.

The judgment emphasized the applicants' cooperation and full disclosure, aligning with the principles of the Settlement Commission to encourage voluntary compliance and settlement of disputes.

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