2008 (6) TMI 600 - Commission - Customs

Summary

Issues involved: Settlement application u/s 127B of the Customs Act, 1962 for evasion of export duty/cess through fraudulent means.

Facts of the case: The applicant and co-applicants were accused of committing fraud by producing forged duty payment challans to evade export duty/cess amounting to Rs. 52,46,637/-. Investigations revealed the evasion in the year 2003-2004. A show cause notice was issued demanding the duty/cess. The applicants filed a settlement application admitting the duty liability and deposited Rs. 53,00,000/- during investigation.

Applicant's submissions: The applicant cooperated in the proceedings, admitted the duty liability, and paid the interest amount. They claimed that the fraud was masterminded by one of the exporters, not known to them, resulting in revenue loss. They requested immunity from interest, fine, penalty, and prosecution. Co-applicants also sought immunity from penalty.

Revenue's objection: The Revenue objected to granting immunities to the applicant.

Settlement terms: The Settlement Commission found the applicant partially responsible for the fraud due to lack of criminal complaint against the alleged executor. However, considering the cooperation and payment made, minimum penalty was imposed. Goods were already exported, so no confiscation was possible. The settlement terms included settling the duty/cess amount, paying interest, granting immunity from penalty exceeding Rs. 50,000 to the applicant, immunity from penalty to co-applicants, and immunity from prosecution to all.

Conclusion: Immunities were granted u/s 127H of the Act, with a caution that the settlement would be void if obtained by fraud or misrepresentation. All concerned parties were informed accordingly.