2009 (4) TMI 735 - Commission - Customs

Issues Involved:
1. Admission of settlement applications.
2. Provisional release of seized goods.
3. Determination of assessable value and duty liability.
4. Confiscation and penalties.
5. Immunities from fine, penalty, and prosecution.

Issue-wise Detailed Analysis:

1. Admission of Settlement Applications:
The applicants filed for settlement before the issuance of Show Cause Notices (SCNs). The Commission, in its interim order, stated that no decision could be made until the SCNs were issued. The Revenue argued that the duty liability admitted by the applicants was less than Rs. 3 lakhs in four cases, making them ineligible for settlement. However, the applicants' advocate countered by pointing out the chaotic market and valuation scenario, and the voluntary acceptance of higher duty liability by the applicants. The Commission accepted the higher duty liability for four cases but rejected the reduced duty liability for the fifth SCN.

2. Provisional Release of Seized Goods:
The applicants requested the provisional release of goods, arguing that mounting container/demurrage charges and the perishable nature of the imported items necessitated immediate clearance. The Revenue opposed this, citing ongoing investigations and the need to ascertain the correct assessable value. The Commission did not grant provisional release but proceeded to determine the duty liability and penalties.

3. Determination of Assessable Value and Duty Liability:
The goods were found to be under-invoiced and unbranded consumer goods of Chinese origin. The market enquiry revealed that the goods were sold without proper bills, making it difficult to ascertain their value. The Commission accepted the assessable values determined by the Revenue after the market survey. The final duty liabilities were settled as follows:
- M/s. Mansoor Arts: Rs. 3,73,847/-
- M/s. Atlas Impex: Rs. 3,92,463/-
- M/s. ASR Enterprises: Rs. 3,88,858/-
- M/s. Flex Overseas: Rs. 4,02,361/-
- M/s. Fedex Traders: Rs. 7,87,869/-

4. Confiscation and Penalties:
The Commission noted the admitted undervaluation and other irregularities, rendering the goods liable to confiscation. However, considering the demurrage burden, the Commission granted complete immunity from fines in lieu of confiscation. Regarding penalties, the Commission acknowledged the preplanned misuse of IE Codes and willful undervaluation but granted some mitigation due to the applicants' subsequent cooperation. The penalties imposed were:
- M/s. Mansoor Arts: Rs. 37,000/-
- M/s. Atlas Impex: Rs. 39,000/-
- M/s. ASR Enterprises: Rs. 38,000/-
- M/s. Flex Overseas: Rs. 40,000/-
- M/s. Fedex Traders: Rs. 50,000/-

5. Immunities from Fine, Penalty, and Prosecution:
The Commission granted immunity from prosecution under the Customs Act to the applicants. The immunities were granted under sub-section (1) of Section 127H of the Act, with a warning that the order would be void if obtained by fraud or misrepresentation of facts.

The final order settled the duty liabilities, granted partial immunity from penalties, and provided immunity from prosecution, thereby resolving the applications for settlement.

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