2009 (3) TMI 745 - Commission - Customs

Issues Involved:
1. Eligibility of the applicant for settlement under Section 127B of the Customs Act, 1962.
2. Mis-declaration of the year of manufacture and value of the imported vehicle.
3. Liability for differential duty, interest, fine, and penalty.
4. Request for immunity from fine, penalty, and prosecution.

Detailed Analysis:

1. Eligibility of the Applicant for Settlement:
The applicant filed for settlement under Section 127B of the Customs Act, 1962, regarding the import of a Toyota Land Cruiser. The applicant claimed eligibility under sub-section (2) of Section 127B(2) of the Act, stating that more than 180 days had passed since the seizure without issuance of a Show Cause Notice (SCN). The Settlement Commission allowed the application to proceed, noting that the applicant had stepped into the shoes of the original importer, Shri Harchand Singh, and was thus covered by the term "any other person" in Section 127B(1).

2. Mis-declaration of the Year of Manufacture and Value:
The SCN issued by the Additional Director General, DRI, Mumbai, indicated that the vehicle was imported under the Transfer of Residence (TR) scheme, with the year of manufacture mis-declared as 1998 instead of 2002. This mis-declaration aimed to suppress the actual value and claim higher depreciation, thereby evading customs duty. The applicant admitted the mis-declaration and agreed to pay the differential duty.

3. Liability for Differential Duty, Interest, Fine, and Penalty:
The SCN proposed to:
- Take the year of manufacture as November 2002.
- Redetermine the vehicle's value using the residual method under Rule 8 of the Customs Valuation Rules, 1988, amounting to Rs. 14,74,430/-.
- Demand differential duty of Rs. 15,19,833/- and interest under Section 28AB of the Act.
- Confiscate the vehicle under Sections 111(m) and 111(o) of the Act.
- Impose penalties under Sections 112(a), 112(b), and 114A of the Act.
- Adjust amounts already paid by the applicant towards the differential duty, interest, and any fine or penalty imposed.

The applicant admitted the duty liability and interest, having already deposited Rs. 14,63,806/- and Rs. 3,91,540/- respectively. The Commission settled the customs duty at Rs. 15,19,833/-, directing the applicant to pay the balance amount of Rs. 56,027/- within 15 days. The interest liability was to be recalculated by the Revenue, with the applicant required to pay any balance interest within 15 days of notification.

4. Request for Immunity from Fine, Penalty, and Prosecution:
The applicant requested immunity from fine, penalty, and prosecution, citing cooperation and full disclosure. The Commission noted that the applicant had abetted the offense by becoming a co-borrower and taking possession of the car, thereby circumventing the two-year no-sale condition. While the Commission was not inclined to grant total immunity, it decided to take a lenient view due to the applicant's cooperation and full disclosure.

The Commission imposed:
- A redemption fine of Rs. 50,000/- in lieu of confiscation.
- A penalty of Rs. 20,000/-.
- Directed the applicant to present the car before DRI officers or pay the fine within 15 days.
- Granted immunity from prosecution subject to the payment of all dues.

The Commission also noted that the order would be void if obtained by fraud or misrepresentation and clarified that the order applied only to the applicant, allowing the Revenue to take action against other noticees.

Conclusion:
The Settlement Commission settled the case under Section 127C(5) of the Customs Act, 1962, with specific terms and conditions, including payment of customs duty, interest, fine, and penalty. The applicant was granted partial immunity from prosecution, with the order subject to conditions and potential voidance in case of fraud or misrepresentation. The decision was tailored to the applicant's cooperation and full disclosure, with the Revenue retaining the right to proceed against other involved parties.

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