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2016 (4) TMI 407 - AT - CustomsDemand of duty - Time barred - Denial of exemption under Notification No. 84/97-CUS dated 11/11/1997 - Import of goods for setting up of a co-generation power plant - Goods are not eligible for concession under the said notification as the certificates are not proper and genuine bearing forged signature of the competent officer - Held that - on being informed by the Investigating Officer about forgery and illicit nature of import, OCIL deposited the full duty liability before even the adjudication of the case. The concession on the goods cannot be claimed based on forged documents irrespective of who is responsible for such forgery. Submission of such forged document for claiming exemption is a clear case of mis-statement. OCIL s plea that they are not involved in the forgery and hence, there is no willful mis-statement on their part cannot be accepted in so far as the correct duty liability on the imported goods are concerned. Therefore, by referring Hon ble Supreme Court s decision in CC (Preventive) vs. Aafloat Textiles (I) P. Ltd. 2009 (2) TMI 75 - SUPREME COURT , since fraud was involved, in the eye of law such documents had no existence. Since the documents have been established to be forged or fake, obviously fraud was involved and that was sufficient to extend the period of limitation. Confiscation of goods in lieu of redemption fine - Impugned goods were neither seized nor released on provisional basis in terms of bond executed by the importer - Held that - No redemption fine can be imposed in the above situation. Hence, imposition of redemption fine on the goods which were never available for confiscation is not legally sustainable. Imposition of penalty - Section 112 of the Customs Act - Goods liable for confiscation in view of irregular claim for exemption - Held that - while the goods were found to be not eligible for concession, in view of forged certificate, the role of the importer has to be seen in the factual context. Since, wrong claim of exemption will attract provisions for confiscation of goods, penalty under Section 112 will get attracted on OCIL. Imposition of penalty - Section 112(a) & 114A of the Customs Act - Held that - act of collusion, willful mis-statement or mis-representation are not proven so the penalty under Section 114A cannot be imposed on the importer (OCIL). ICICI Bank Ltd as are not involved in the act of forgery and have not knowingly abetted any illegal act and hence are not liable for penalty under Section 112. - Appeals disposed of
Issues Involved:
1. Correctness of denial of exemption under Notification No. 84/97-CUS. 2. Imposition of redemption fine in lieu of confiscation of imported goods. 3. Correctness of imposition of penalties on OCIL under Section 112 of the Customs Act, 1962. 4. Non-imposition of penalty under Section 114A on OCIL and under Section 112 on ICICI Bank Ltd. Issue-wise Detailed Analysis: 1. Correctness of Denial of Exemption: The appellant-importer (OCIL) imported goods for setting up a co-generation power plant and claimed exemption under Notification No. 84/97-CUS. Investigations revealed that the Project Implementing Authorities Certificate (PIAC) required for claiming the exemption was fabricated. Consequently, the exemption was denied. The Tribunal upheld the denial, stating that the goods were not eligible for the concession as the certificates bore forged signatures. The Tribunal referenced the Hon’ble Supreme Court’s decision in CC (Preventive) vs. Aafloat Textiles (I) P. Ltd., which established that fraud extends the period of limitation for duty demands. OCIL’s argument that the demand was time-barred was rejected, as the submission of forged documents constituted a clear case of mis-statement. 2. Imposition of Redemption Fine: The Tribunal found that the imposition of redemption fine was not legally sustainable because the imported goods were neither seized nor provisionally released under bond. Citing the Larger Bench decision in Bhagyanagar Metals Ltd., the Tribunal held that redemption fine could not be imposed in the absence of seizure or provisional release. The Tribunal set aside the redemption fines imposed by the Original Authority. 3. Correctness of Imposition of Penalties on OCIL: OCIL contested the penalties under Section 112, claiming they acted in good faith and that Section 112 was not invoked in the show cause notice. The Tribunal noted that the Original Authority had examined these issues and concluded that OCIL was liable for penalties under Section 112 due to the irregular claim for exemption, which made the goods liable for confiscation. The Tribunal upheld the penalties of ?10 lakhs and ?5 lakhs imposed on OCIL under Section 112, referencing the Hon’ble Supreme Court’s stance on strict liability for statutory breaches. 4. Non-imposition of Penalty under Section 114A on OCIL and Section 112 on ICICI Bank Ltd.: The Revenue appealed for the imposition of penalties under Section 114A on OCIL and Section 112 on ICICI Bank Ltd. The Tribunal upheld the Original Authority’s decision not to impose these penalties. It was found that OCIL was not involved in the forgery of the certificates, and thus, the conditions for imposing penalties under Section 114A were not met. The Tribunal distinguished between the confirmation of duty demand and the imposition of penalties, noting that penalties require proof of collusion or willful mis-statement, which was not established in this case. Regarding ICICI Bank Ltd., the Tribunal found no evidence of their involvement in the forgery or any illegal act, and thus, no basis for imposing penalties under Section 112. Conclusion: The appeals were disposed of with the following terms: - The exemption under Notification No. 84/97-CUS was not available to the imported goods. - The demand for customs duty along with applicable interest was upheld. - The penalties imposed on OCIL under Section 112 were upheld. - The redemption fines imposed by the Original Authority were set aside. - The non-imposition of penalties on OCIL under Section 114A and on ICICI Bank Ltd. under Section 112(a) was upheld. (Order pronounced in the open court on 05/04/2016)
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