2014 (3) TMI 460 - AT - Customs

Exemption under Notification No.21/2002-Cus. dt. 1.3.2002 under Sl. No.347-C read with condition No.105 - Exemption is available in respect of inputs made for overhauling the engine of flying clubs - Penalty under Section 28 of Customs Act, 1962 - Penalty under Section 114A of Customs Act - Held that - in the annexures, the bills of entry have not been relied upon and the statement prepared based on the bills of entry has been relied upon. List of false/fake purchase orders is shown as annexures but copies of fake orders is not found as an annexure to the show-cause notice - The show-cause notice as well as order-in-original relied on the statement which was prepared by the employee of the appellant - There is no evidence to show that the appellant had asked for documents from DRI before the order-in-original was passed. Further, the appellants have also not replied to the show-cause notice. The appellant should get an opportunity to study and find out whether there is any method by which they can claim exemption from customs duty - it is proper that the matter has to be remanded and such remand cannot be done without requiring the appellant to deposit at least a portion of the amount demanded - Matter remanded back with partial stay granted.

Summary

Issues involved:
Import of aircraft spare parts claiming exemption under Notification No.21/2002-Cus, fabrication of certificates by the appellant to claim exemption, initiation of proceedings resulting in demand of duty, interest, and penalties under Customs Act, 1962, lack of participation in adjudication process, reliance on fake purchase orders, need for remand for fresh adjudication, deposit requirements for appellants involved in the case.

Analysis:

1. Import claiming exemption under Notification: The appellant imported aircraft spare parts claiming exemption under Notification No.21/2002-Cus. However, investigations revealed that the certificates supporting the exemption were fabricated by the appellant, leading to the initiation of proceedings resulting in the demand for duty, interest, and penalties under the Customs Act, 1962.

2. Lack of participation in adjudication process: It was noted that the appellant did not actively participate in the adjudication process. The appellant's submission highlighted their attempts to find legal ways to import without duty payment, including seeking advice from JDGFT and the Commissioner (Customs). However, the lack of proper documentation and participation raised concerns during the proceedings.

3. Reliance on fake purchase orders: The appellant admitted to importing goods using bogus purchase orders and claiming exemptions not admissible under the law. The reliance on false/fake purchase orders was a significant issue raised during the proceedings, indicating a lack of compliance with customs regulations.

4. Remand for fresh adjudication: Considering the submissions from both sides, the Tribunal decided to remand the matter for fresh adjudication. The appellant was required to deposit a specified amount within a set timeline to proceed with the reevaluation of the case, emphasizing the need for compliance and cooperation in the process.

5. Deposit requirements for appellants: Different deposit amounts were specified for various individuals involved in the case, including the President, Directors, and employees. The deposit requirements were set as a condition for the remand process, ensuring accountability and compliance with the legal proceedings.

6. Direction for providing necessary documents: The Revenue was directed to provide all necessary documents to the appellants for preparing their defense. A timeline was given for the submission of replies after receiving the required documents, emphasizing the importance of transparency and access to information in legal proceedings.