2004 (9) TMI 600 - Commission - Customs

Issues Involved:
1. Allegations of importing leather chemicals in excess of permissible quantities under fabricated DEEC licences.
2. Manipulation of DEEC licences by brokers.
3. Settlement of duty liability and immunity requests by the applicants.
4. Penalty and prosecution considerations for the importer and the licence broker.

Detailed Analysis:

1. Allegations of Importing Leather Chemicals in Excess of Permissible Quantities:
The case involves M/s. VAS Noorullah & Company (VASN), a manufacturer-exporter who imported leather chemicals under the DEEC scheme. Investigations revealed that VASN imported quantities exceeding those permitted by manipulating DEEC licences. Specific instances of manipulation included changing units from grams to kilograms and prefixing digits to inflate quantities.

2. Manipulation of DEEC Licences by Brokers:
The investigation identified several brokers, including Shri Ishwarchand B. Tater, who admitted to manipulating licences. For example, in one instance, a licence for 202164 grams of adhesive was altered to 2021.64 kgs., facilitating an excess import of 1819.47 kgs. Statements from other brokers, such as Shri Prithviraj Kawad and Shri Prakash Kumar, confirmed similar manipulations, involving double entries and incorrect item descriptions.

3. Settlement of Duty Liability and Immunity Requests by the Applicants:
The Settlement Commission admitted the applications of VASN and Shri Ishwarchand B. Tater after confirming the conditions under Section 127B of the Customs Act, 1962. VASN accepted the allegations and paid the admitted duty of Rs. 6,14,808/-. Their advocate argued that VASN was unaware of the manipulations until the investigation and requested immunity from interest, penalty, and prosecution.

4. Penalty and Prosecution Considerations for the Importer and the Licence Broker:
The Commission noted that VASN imported goods based on manipulated licences provided by brokers. Given that VASN had paid the duty and lost the benefits of the DEEC licences, the Commission considered their request for immunities favorably but did not waive interest entirely. For Shri Ishwarchand B. Tater, who admitted to systematic manipulation of licences, the Commission granted immunity from prosecution under the Customs Act, 1962 but imposed a penalty of Rs. 61,480/-.

Final Judgment:
1. Duty Liability: Settled at Rs. 6,14,808/-, already paid by VASN.
2. Interest: VASN to pay simple interest at 10% p.a. on the duty amount from the date it was due until payment. Immunity granted for interest exceeding 10% p.a.
3. Immunity for VASN: Granted from penalty, prosecution, and confiscation under the Customs Act, 1962. No order on immunity from prosecution under other allied acts as they were not specified.
4. Penalty for Shri Ishwarchand B. Tater: Rs. 61,480/- under Section 112(a) of the Customs Act, 1962. Immunity granted from additional penalties.
5. Immunity for Shri Ishwarchand B. Tater: Granted from prosecution under the Customs Act, 1962. No order on immunity from prosecution under other allied acts.

Conditions and Withdrawal of Immunities:
The immunities are granted under Section 127H(1) of the Customs Act, 1962, and are subject to withdrawal if any material information is withheld or fraudulent means are employed in obtaining the settlement.

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