2014 (9) TMI 402 - HC - Customs

Review petition - Waiver of pre-deposit of penalty - applicant-appellant was directed to deposit ₹ 25 crores against duty demand and interest - main contention raised was that waiver of the penalty amount should have been granted. - Deposit of ₹ 25 crores, in terms of order dated 22nd July, 2014, has not been made and as per the office report, even process fee has not been filed, though this is contested by the counsel for the applicant. Now, this application for review/recall has been filed. - Held that - we are not inclined to allow the present review application and the same is dismissed.

Summary

Issues: Review application for modification/recall of order to deposit money, Allegations of duty evasion and penalty imposition, Misuse and violations of Customs Act

Review Application for Modification/Recall of Order to Deposit Money:
The judgment pertains to an application under Order XLVII for the review of an order directing the appellant to deposit a certain amount within a specified period. The Customs Excise and Service Tax Appellate Tribunal had previously directed the appellant to deposit a substantial sum against duty demand and penalty. The High Court refrained from passing a detailed order initially, considering the waiver of the penalty amount contention. The applicant failed to make the required deposit and subsequently filed an application for review/recall. The applicant, a joint venture company, was alleged to have sold imported goods in violation of Customs regulations. The High Court noted the detailed findings of the Tribunal regarding the duty evasion and penalties imposed. Despite arguments regarding lack of funds and employee malpractices, the Court dismissed the review application, emphasizing the significant amount involved and the need for pre-deposit.

Allegations of Duty Evasion and Penalty Imposition:
The Tribunal's order detailed instances of duty evasion and violations by the appellant, including the sale of imported goods to domestic passengers in breach of Customs regulations. Specific instances of fraudulent practices, such as the repeated use of a non-existent passport number and fabrication of records, were highlighted. The investigation revealed substantial duty evasion amounting to crores. The High Court, in its analysis, acknowledged the gravity of the findings, emphasizing the substantial amount involved in the fraudulent transactions. The Court noted the imposition of penalties and interest due to the evasion, underscoring the seriousness of the violations and the need for compliance with Customs regulations.

Misuse and Violations of Customs Act:
The judgment highlighted the misuse and violations of the Customs Act by the appellant company in operating duty-free shops at the airport. The findings of the Tribunal pointed out instances of fraudulent sales, falsification of records, and evasion of duties. The Court observed that the quantum of dubious transactions indicated widespread misuse and potential personal gains by deviant employees. Despite arguments regarding lack of funds and employee misconduct, the Court upheld the previous order, emphasizing the significant duty evasion amount and the need for compliance. The dismissal of the review application underscored the Court's stance on the seriousness of Customs violations and the importance of adhering to regulatory requirements.