2015 (2) TMI 914 - AT - Customs

Waiver of penalty - Benefit under DFIA scheme announced in Foreign Trade Policy - License on the basis of exports - Dispute in export quantity - Held that - The Applicant are claiming benefit under DFIA scheme on the basis of exports made by them against various shipping bills recorded as above. It is the contention of the Revenue that applying the norms, the quantity claimed to have been exported by the Applicants are incorrect. Hence, the benefit under DFIA Scheme cannot flow from the said exports. Whereas, the contention of the Applicants on the other hand is that the licensing authority, namely Directorate General of Foreign Trade has even though initially through their letter dated 12.12.2006 disputed the fact of export of the said goods, but later on scrutiny and verification closed the case against the Applicants, and in support they have placed letters issued by the DGFT in respective Appeals. Also, both sides agree that the benefit out of the said export is yet to be availed by the Applicants, a fact not disputed by the Revenue. Therefore, at this stage, we are of the view that confirmation of penalty against the Applicants may not sound well. Their involvement and violation of the provisions of Customs Act would be examined only after necessary confirmation received from DGFT by the Customs department which would be considered at the time of disposal of the Appeals. At this stage we are of the opinion that the Applicants could able to make out a prima facie case for waiver of penalty imposed against each of them. Consequently pre-deposit of penalty against each of the Applicants is waived and its recovery stayed during pendency of the appeal. Decided in favour of appellants.

Summary

Issues:
Waiver of penalty under Section 114(i) & (ii) and Section 114AA of Customs Act, 1962 for three separate Applications.

Analysis:
The judgment involves three Applications seeking waiver of penalties under different sections of the Customs Act, 1962. The Applicants had exported goods under the DFIA Scheme and obtained licenses from the DGFT based on those exports. The Revenue disputed the export quantity and benefit eligibility. The Applicants argued that the DGFT had accepted the export quantity as correct after initial concerns. The Ld. Advocate contended that the Customs department's dispute based on earlier letters and assumptions was not valid. The original licenses were deposited with the Customs department, and the disputed benefits were not availed, making the violation premature according to the Applicants.

The Revenue, represented by the Ld. Special Counsel, stated that the correct quantity of goods exported was determined based on the Applicants' declarations. The adjudication order was passed earlier, but the department had requested license cancellation from DGFT, with no response received by the time of the hearing.

After hearing both sides and examining the records, the Tribunal found that the Applicants were claiming benefits under the DFIA Scheme for their exports. The Revenue argued that the claimed export quantities were incorrect, thus disqualifying them from the scheme. However, the Applicants contended that the DGFT had closed the case against them after initial disputes, supported by letters from the DGFT. Both parties agreed that the disputed benefits were not yet utilized by the Applicants. The Tribunal concluded that until confirmation was received from the DGFT, the penalty confirmation against the Applicants was premature. Therefore, the Tribunal waived the pre-deposit of penalties for each Applicant and stayed the recovery during the Appeal's pendency. The Revenue was given the liberty to present the DGFT's outcomes to the Tribunal for further consideration.