2004 (7) TMI 553 - Commission - Customs

Issues:
1. Misuse of Advance Licence Scheme
2. Diversion of duty-free imported goods
3. Misdeclaration in export documents
4. Arrest of individuals involved
5. Show cause notice by Asstt. DGFT, Kanpur
6. Application for settlement of the case
7. Jurisdictional concerns regarding the notice
8. Admissibility of the application before the Settlement Commission
9. Accuracy of information in the application
10. Jurisdictional limitations of the Bench
11. Decision on the application for imports through Mumbai Port

Analysis:
1. The case involved the misuse of the Advance Licence Scheme by a company, where goods were misdeclared and diverted for profit. The company exported inferior substitute material as Garlic Powder, with investigations revealing discrepancies in the exported goods. Samples confirmed the inferior quality of the goods, leading to the seizure of the goods.

2. The investigation uncovered that the company had obtained an Advance Licence for duty-free import of garlic but diverted the imported goods into the domestic market for profit. The imported goods were not used for the intended purpose of export, and the company engaged in fraudulent activities with the assistance of certain individuals, resulting in the arrest of key personnel.

3. Following the investigations, a show cause notice was issued by the Assistant DGFT, Kanpur, initiating action under the Foreign Trade Act and seeking explanations from the company regarding the violations. The Revenue, however, had not issued a show cause notice at that point.

4. The company and the individuals involved filed an application for settlement of the case before the Settlement Commission, admitting duty liability and depositing a significant amount during the investigations. Legal representatives argued for the admissibility of the application based on precedents and the receipt of a notice from the DGFT.

5. There were jurisdictional concerns raised regarding the notice issued by the DGFT and the involvement of co-applicants. The Revenue opposed the admission of the applications, citing discrepancies in the notice and highlighting the export activities of the company.

6. The Settlement Commission considered the application and relevant legal judgments, including a Gujarat High Court decision, to determine the admissibility of the case. Despite inaccuracies in the application regarding the date of seizure, the Commission decided to proceed with the application for imports through Mumbai Port only.

7. The Commission advised the company to approach the Chairman of the Settlement Commission for matters related to imports through Chennai Port due to jurisdictional limitations. The applications for imports through Mumbai Port were allowed to proceed, with the admitted duty liability adjusted against the deposited amount.

8. The Commission emphasized the legal provisions and obligations under the Customs Act, drawing attention to the consequences of non-compliance. The decision highlighted the importance of accurate information in applications and the need to adhere to jurisdictional boundaries for effective resolution of cases.

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