2007 (4) TMI 569 - Commission - Customs

Summary

Issues:
Settlement under Section 127B(1) of the Customs Act, 1962 regarding import of vehicles under the EPCG Scheme availing concessional rate of duty.

Analysis:
The case involved applications for settlement under Section 127B(1) of the Customs Act, 1962 by a company and individuals against a Show Cause Notice demanding customs duty for importing vehicles under the EPCG Scheme. The vehicles, a Mercedez Benz car and a Bentley car, were not used for the prescribed purpose of earning Foreign Exchange, leading to the SCN demanding a total amount of Rs. 1,02,74,446/- along with penalties and interest. The applicants admitted the allegations, paid the full duty due, and sought immunities from fine, penalty, prosecution, and interest.

The Revenue opposed the grant of immunities, stating that the vehicles were not used for the intended purpose, and the duty evasion was a deliberate misuse of the EPCG Scheme for personal gain. They argued that the applicants did not qualify for immunity and cited previous judgments to support their position.

The Bench considered the submissions from both sides and decided on the grant of immunities. Immunity from penalty was granted based on the lack of evidence provided by Revenue regarding personal preferences in vehicle importation. However, immunity from interest was not granted due to the misuse of EPCG licenses and non-fulfillment of export obligations, as supported by various High Court judgments.

The final order settled the Customs duty at Rs. 1,02,74,446/- and directed the payment of interest at 15% from the due date. Immunity from redemption fine was not granted, and the Bench ordered confiscation of the vehicles with an option for redemption on payment of fines. Immunity from penalty and prosecution was granted to the applicants under the Act and relevant Rules.

The order granted immunities under Section 127H(1) of the Act, with a caution that it would be void if obtained through fraud or misrepresentation. The applicants were informed of the provisions of relevant subsections, and all concerned parties were notified accordingly.