2003 (5) TMI 433 - Commission - Customs

Issues Involved:
1. Liability of imported goods to confiscation under Section 111(o) of the Customs Act, 1962.
2. Levy of customs duty and interest for violation of Notification No. 43/2002-Cus.
3. Adjustment of the amount already realized against the duty liability.
4. Imposition of penalty under Section 114A of the Customs Act, 1962.
5. Imposition of penalty under Section 112(a) and 112(b) of the Customs Act, 1962 on various entities.
6. Jurisdiction of the Settlement Commission to entertain the application.

Detailed Analysis:

1. Liability of Imported Goods to Confiscation under Section 111(o):
The applicants imported non-alloy steel billet and wire rod under Notification No. 43/2002-Cus without paying customs duty, citing the notification. The goods were to be used in manufacturing for export. However, due to financial constraints, part of the goods was sold in the domestic market. Consequently, the Revenue seized some of the imported goods but allowed their release against the deposit of duty. The Show Cause Notice (SCN) called for an explanation as to why the imported goods should not be confiscated under Section 111(o) of the Customs Act, 1962.

2. Levy of Customs Duty and Interest:
The SCN also questioned why customs duty amounting to Rs. 11,36,95,189.86, foregone under Notification No. 43/2002-Cus, should not be levied along with interest at 24% per annum for violating the notification's conditions. The applicants admitted their duty liability as indicated in the SCN but requested an adjustment against the duty already deposited.

3. Adjustment of Amount Realized Against Duty Liability:
The SCN proposed adjusting Rs. 7,00,60,000 already realized from the applicants against the duty liability and accrued interest. The applicants sought to have this amount considered in their duty liability settlement.

4. Imposition of Penalty under Section 114A:
The SCN proposed imposing a penalty under Section 114A of the Customs Act, 1962, on the applicants and their directors for their willful fraudulent act to evade a significant amount of customs duty. The applicants admitted their duty liability but requested to pay the balance in four monthly installments.

5. Imposition of Penalty under Section 112(a) and 112(b):
The SCN also proposed penalties under Section 112(a) and 112(b) on various entities for their involvement in acts of omission and commission, rendering the goods liable to confiscation under Section 111(o).

6. Jurisdiction of the Settlement Commission:
The Revenue objected to the Settlement Commission's jurisdiction, arguing that the applicants had not disclosed anything new that had not already been disclosed to the proper officer. The Settlement Commission clarified that the term "case" refers to proceedings for the levy, assessment, and collection of duty, and the bond executed by the applicant does not constitute an assessment document. The Commission noted that the applicants disclosed a nil duty liability at the time of import but now admitted over Rs. 11 crores as duty liability, which constitutes additional liability being disclosed before the Commission.

Conclusion:
The Settlement Commission allowed the applications to proceed under Section 127C(1) of the Customs Act. The applicants were directed to pay the admitted duty liability of Rs. 4,36,35,189.86 within 30 days. The amount of Rs. 7,00,60,000 already paid was adjusted towards the admitted duty liability. The request to pay the duty in installments was denied based on the applicants' financial records. The seized goods were allowed to be released upon execution of a bond and bank guarantee. The Commission emphasized compliance with the statutory provisions and previous case laws, confirming its jurisdiction to entertain the application despite the Revenue's objections.

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