2005 (3) TMI 695 - Commission - Customs

Summary

Issues:
Settlement of customs duty liability, grant of immunity from fine, penalty, and prosecution, calculation and grant of interest immunity.

Settlement of Customs Duty Liability:
The case involved an application by a company engaged in horse racing and breeding, which had imported horses and was suspected of evading customs duty through undervaluation. The company voluntarily disclosed the true values of the imported horses and admitted the duty liability demanded in the Show Cause Notice. The Settlement Commission admitted the applications and settled the customs duty at Rs. 36,79,950, which had already been deposited by the company. The final hearing highlighted the complexities of horse evaluation, with the company cooperating fully and making voluntary disclosures.

Grant of Immunity from Fine, Penalty, and Prosecution:
The Settlement Commission granted immunity to the company and co-applicants from fines, penalties, and prosecution under the Customs Act. The company's cooperation and full disclosure of duty liability played a significant role in the grant of immunity. The Commission referenced similar cases where immunity was granted to support the decision in this case.

Calculation and Grant of Interest Immunity:
Regarding interest, the company sought full immunity citing early deposit of the duty liability and voluntary admission of time-barred demands. The Settlement Commission differentiated between intentional duty evasion and mala fide actions, emphasizing the liability to pay interest in the former case. Despite the voluntary admission of time-barred demands, the Commission decided to levy simple interest at 10% per annum from the due date until payment. The company was granted immunity from interest exceeding 10% per annum, with a requirement to calculate, verify, and pay the interest within 30 days.

The immunities granted were in accordance with Section 127H of the Act, with a provision that the settlement would be void if obtained through fraud or misrepresentation. The detailed analysis of the case records and contentions raised by both parties led to a comprehensive settlement addressing customs duty liability, fines, penalties, prosecution, and interest obligations. All concerned parties were duly informed of the settlement terms and conditions.