2014 (12) TMI 1228 - Commission - Customs

Demand of duty, interest and penalty - Export of Ferro Silicon - Obtained 54 DEPB licences by wilful misstatement and suppression of country of origin and availed export incentive on export of Bhutanese origin, therefore, no DEPB benefit to be available - DEPB licences were sold by the exporter and were utilized by the purchasers for payment of duty on goods imported by them. Held that - Out of total duty demanded ₹ 3,20,46,327/-, only a sum of ₹ 25,10,066/- has been demanded from the applicant and the balance from other importers. None of these importers have approached the Settlement Commission. As per sub-section (1) of Section 127B of the Customs Act, 1962, Any importer, exporter or any other person may, in respect of a case, relating to him make an application before adjudication to the Settlement Commission to have the case settled . Further, an order of settlement under Section 127C(8) has to provide for the terms of settlement including any demand by way of duty, penalty and interest. In the present case, Bench is unable to settle these terms as none of the persons from whom a major portion of duty has been demanded in the SCN have approached the Settlement Commission and some of them do not even fall in the jurisdiction of this Bench. Therefore, in the absence of the same, the application to settle the duty demanded from those other importers by the applicant cannot be entertained. - Application rejected

Summary

Issues:
Settlement application under Section 127B of the Customs Act, 1962 for dispute arising from Show Cause Notice regarding export of Ferro Silicon of Bhutanese origin, misstatement in DEPB licenses, duty foregone recoverability, and liability of importers.

Analysis:

1. Settlement Application and Dispute Origin:
The Settlement Commission received an application under Section 127B of the Customs Act, 1962 from M/s. Rohit Ferro Tech Ltd. regarding a dispute arising from a Show Cause Notice issued by the Directorate of Revenue Intelligence. The notice alleged misdeclaration of origin for exported Ferro Silicon and misuse of DEPB licenses.

2. Allegations and Duty Liability:
The exporter was accused of exporting Ferro Silicon of Bhutanese origin while claiming it to be of Indian origin. Misstatement in DEPB licenses led to duty foregone amounting to Rs. 25,10,066, which was deemed recoverable under Section 28AAA of the Customs Act, along with interest. Importers utilizing these licenses were also held liable for unpaid duty.

3. Settlement Application Details:
In the settlement application, the applicant admitted duty liability of Rs. 3,20,46,327 along with interest. Request for immunity from fine, penalty, and prosecution was made. However, discrepancies in the duty amount were later clarified by the DRI, reducing the liability to Rs. 3,12,60,465.

4. Hearing and Arguments:
During the hearing, the applicant's representatives argued against confiscation of goods and imposition of penalties, citing legal provisions and judicial precedents. The Department contended that duty liability and penalties were justified due to misdeclaration of goods and DEPB licenses.

5. Decision and Rejection of Application:
The Bench considered the settlement application, show cause notice, and submissions from both parties. The total duty demanded was Rs. 3,20,46,327, with only a portion demanded from the applicant. However, as other importers listed in the notice did not approach the Settlement Commission, the terms of settlement could not be finalized. Consequently, the application was rejected.

6. Conclusion and Order:
The Settlement Commission rejected the application due to non-involvement of other importers listed in the notice. The order was to be communicated to the applicant, jurisdictional Commissioner, and relevant authorities for further action and information dissemination.