2011 (4) TMI 1176 - Commission - Customs

Immunity from fine penalty and prosecution - Unaccompanied Baggage - attempt to smuggle the goods into India in the guise of unaccompanied baggage - two applicants have fully admitted the demand of duty as made against them in the Show Cause Notice and have also promptly deposited the same the prayer made by them for granting full immunity from fine penalty etc. - Held that - The applicants cannot be said to have acted in a bona fide manner when they visited abroad and purchased goods worth over Rupees two Crores with intent to import the same for their personal use yet they did not import the goods as their own personal Baggage but entrusted the responsibility to a Freight Forwarder who transshipped the goods from another port in the name of persons clearly unrelated to the two applicants. The covert methods used for transshipping the goods clearly expose the collusion of the applicants in giving effect to their mala fide intent to evade duty. It is evident from the facts and circumstances of the case that the two applicants made an attempt to evade Customs duty by so organizing the imports as to avert direct responsibility for defrauding the Revenue. The Bench therefore holds that in view of gross misdeclaration of the contents and the value of goods in BDFs the imported goods have been rendered liable for confiscation and the two applicants have also rendered themselves liable to penalty for their act of omission and commission committed in relation to the imported goods. Redemption fine and penalty reduced and immunity granted from in excess amount fixed for this purpose. Full immunity granted from prosecution.

Summary

Issues Involved:
1. Eligibility of application under Section 127B of the Customs Act, 1962.
2. Bona fide nature of the importers.
3. Admissibility of Baggage Declaration Form (BDF) as Bill of Entry.
4. Determination and settlement of customs duty, interest, fine, and penalty.
5. Grant of immunity from prosecution.

Issue-wise Detailed Analysis:

1. Eligibility of Application under Section 127B of the Customs Act, 1962:
The Revenue opposed the settlement applications, arguing that under Section 127B(1) of the Act, no application could be made unless a Bill of Entry was filed by the applicants. The Revenue contended that the BDF did not meet the definition of Bill of Entry under Section 2(4) of the Act. However, the Bench observed that it has been a consistent view of the Settlement Commission that in Baggage cases, filing a declaration through BDF is as good as filing a declaration through Bill of Entry. The Bench cited previous decisions and judgments from the Hon'ble High Courts of Bombay and Madras supporting this view. Therefore, the applications were deemed eligible for settlement.

2. Bona Fide Nature of the Importers:
The Revenue argued that the applicants were not bona fide importers as the goods were shipped in the names of unrelated persons, and the BDFs were not filed by the applicants. The Bench, however, noted that the Show Cause Notice (SCN) issued in this case held the two applicants as 'de facto importers' of the seized goods. The applicants admitted the entire duty demanded and paid the amounts during investigations. The Bench concluded that while the applicants were the de facto importers, their actions indicated an intent to evade customs duty by not shipping the goods in their own names and using covert methods for transshipment.

3. Admissibility of Baggage Declaration Form (BDF) as Bill of Entry:
The Bench reiterated that BDFs are considered equivalent to Bills of Entry for the purpose of settlement applications under Section 127B of the Act. This position has been upheld in various orders by the Settlement Commission and accepted by the Hon'ble High Courts. The Bench held that the Settlement Commission does not lack jurisdiction to settle cases relating to Baggage and that the applications fulfilled the eligibility conditions.

4. Determination and Settlement of Customs Duty, Interest, Fine, and Penalty:
The customs duty for the first applicant was settled at Rs. 65,56,623/- and for the second applicant at Rs. 10,94,055/-. Both applicants had already paid amounts exceeding the duty demanded. No interest was payable as the goods were under seizure for most of the time. The first applicant was granted immunity from redemption fine in excess of Rs. 10,00,000/- and penalty in excess of Rs. 5,00,000/-. The second applicant was granted immunity from redemption fine in excess of Rs. 1,50,000/- and penalty in excess of Rs. 1,00,000/-. The amounts of fine and penalty were to be adjusted from the amounts already deposited by the applicants, with any excess refunded.

5. Grant of Immunity from Prosecution:
The Bench granted immunity to both applicants and the co-applicant from prosecution under the Customs Act, 1962, in relation to the present case. The immunities were granted under sub-section (1) of Section 127H of the Act, with attention drawn to the provisions of sub-sections (2) and (3) of Section 127H. The order of settlement would be void if obtained by fraud or misrepresentation of facts.

Conclusion:
The applications were admitted and settled with the conditions laid down by the Bench. The Revenue was at liberty to take appropriate action against other noticees not covered by this order.