2006 (4) TMI 365 - Commission - Customs

Summary

Issues Involved:
1. Non-declaration of software value in the import of machinery.
2. Provisional release of seized goods.
3. Issuance of Show Cause Notice by the Customs Department.
4. Jurisdiction of the Settlement Commission.
5. Valuation of imported goods.
6. Full and true disclosure of duty liability.

Detailed Analysis:

1. Non-declaration of software value in the import of machinery:
The applicant imported machinery and declared only the hardware value, excluding the software value, believing it was duty-free. The consignment was held and later seized for not declaring the full value for assessment and duty levy. The applicant later included the software value in the EPCG license and requested the release of goods.

2. Provisional release of seized goods:
The applicant approached the Bombay High Court, which directed the Commissioner of Customs to decide on the provisional release of the seized goods. Despite this, the goods were not immediately released, prompting the applicant to file an application under Section 127B of the Customs Act.

3. Issuance of Show Cause Notice by the Customs Department:
The Customs Department issued a Show Cause Notice demanding additional duty and proposing confiscation and penalties. The applicant contested this, arguing that the Settlement Commission had exclusive jurisdiction once the case was admitted for settlement.

4. Jurisdiction of the Settlement Commission:
The Commission held that once an application is admitted, it assumes exclusive jurisdiction over the case, and any Show Cause Notice issued thereafter by the Customs Department is non est. The Commission emphasized that the Revenue could present any material gathered during investigations to the Commission, but parallel proceedings were not permissible.

5. Valuation of imported goods:
The Commission initially held that the transaction value of the goods should be accepted as there was no evidence to discredit it. The Revenue's argument to use the 1998 value of the goods was rejected, considering the rapid depreciation in electronic goods' value. The Commission reaffirmed that the transaction value was correct and settled the duty liability accordingly.

6. Full and true disclosure of duty liability:
The Commission clarified that the issue of full and true disclosure remains open until the final order is passed. It emphasized that if any misrepresentation of facts is found during the proceedings, it could be taken into account while passing the final order. The applicant's duty liability was settled at Rs. 4,86,999, which had already been paid, and the applicant was granted immunity from fine, penalty, and prosecution.

Conclusion:
The Settlement Commission settled the case by accepting the transaction value of the imported goods, confirming the duty liability at Rs. 4,86,999, and granting the applicant immunity from fines, penalties, and prosecution. The Commission also directed the refund of any excess amount deposited by the applicant and emphasized that the settlement would be void if obtained by fraud or misrepresentation.