2005 (1) TMI 622 - Commission - Customs

Summary

Issues: Settlement of duty liability, Forgery of TRAs, Immunity from interest, penalty, and prosecution

Settlement of Duty Liability:
The case involved M/s. Seven Seas Petroleum (P) Ltd. filing an application for settlement of proceedings initiated against them based on a Show Cause Notice issued by the Commissioner of Customs. The company, a regular importer of Kerosene, utilized DEPB licenses and TRAs purchased from other entities for their imports. It was later discovered that the TRA used for clearance of imported kerosene was forged. The applicant admitted and paid the entire duty liability as per the Show Cause Notice, seeking immunity from interest, penalty, and prosecution. The Settlement Commission found that the applicant had made a true and full disclosure, cooperated in the proceedings, and settled the duty liability. Immunity from prosecution and penalty was granted, and interest in excess of 10% per annum was waived.

Forgery of TRAs:
The issue of forgery of TRAs was central to the case. The applicant claimed they were not aware of the forgery and had taken steps to transfer the balance amount back to the authorities upon discovering the forgery. The Revenue representative stated that the direct involvement of the applicant in the forgery was not established, and the Show Cause Notice was issued as a protective measure. The Settlement Commission noted that there was no evidence to indicate the applicant's knowledge of the forgery. The Commission found merit in the applicant's claim of being unaware of the forgery and being cheated by the seller of the TRAs.

Immunity from Interest, Penalty, and Prosecution:
The applicant sought immunity from interest, penalty, and prosecution, arguing that they were not involved in the forgery and had cooperated in rectifying the situation. The Revenue representative contested full immunity from interest, highlighting that the duty was paid only after the admission order. The Settlement Commission granted immunity from prosecution and penalty under the Customs Act, 1962. However, complete immunity from interest was not provided, and the applicant was required to pay interest not exceeding 10% per annum on the settled amount. The Commission emphasized that the granted immunities would be void if obtained through fraud or misrepresentation of facts, as per the relevant provisions of the Customs Act, 1962.

This detailed analysis of the judgment by the Settlement Commission highlights the key issues of duty liability settlement, forgery of TRAs, and the grant of immunities from interest, penalty, and prosecution in the context of the case involving M/s. Seven Seas Petroleum (P) Ltd.