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2019 (4) TMI 1276 - AT - CustomsImposition of penalty on M/s. Libas India, Merchant Exporter - misutilisation of EOU Scheme - HELD THAT - M/s. Libas India has played a significant role in abetting and facilitating the gross evasion of customs duty by misuse of EOU Scheme by M/s. G.N.Rubbertech Pvt. Ltd. It is seen from records that M/s. Libas India has entered into a Purchase Contract worth ₹ 1,31,58,400/- with M/s. G.N.Rubbertech Pvt. Ltd. on 07.11.2003. Records show date-wise purchase of goods from EOU and date-wise payment made through banking channels. The DRI investigations established the role played by M/s. Libas India in facilitating and abetting the evasion of customs duty by M/s. G.N.Rubbertech Pvt. Ltd. - the appellant has been rightly been penalised by the adjudicating authority. Penalty upheld - appeal dismissed.
Issues:
Misuse of Export Oriented Unit (EOU) Scheme, Evasion of Customs Duty, Penalty Imposed on M/s. Libas India Analysis: The appeal before the Appellate Tribunal was filed against the Order-in-Original dated 29.10.2008. Despite multiple hearing dates, the appellant did not appear, leading to the case being taken up for decision due to its age. The case involved the interception and seizure of imported silk fabrics of Chinese origin from the factory premises of M/s. G.N.Rubbertech Pvt. Ltd. Investigations revealed that the EOU had misused the scheme by diverting imported goods into the market without utilizing them for export. The investigations further highlighted the involvement of merchant exporters in showing exports to Bangladesh, including M/s. Libas India. The Directorate of Revenue Intelligence issued a show cause notice in 2007, resulting in the demand for customs duty of ?14.51 Crores from M/s. G.N.Rubbertech Pvt. Ltd. along with penalties. M/s. Libas India, a merchant exporter, was also penalized with a fine of ?5,00,000, which was challenged in the present appeal. While other parties' appeals were dismissed, M/s. Libas India contested the penalty imposed on them, claiming it was unjustified as they were only earning a commission and had no direct involvement in the evasion of customs duty. However, a detailed examination of the case records revealed M/s. Libas India's significant role in aiding the evasion of customs duty by M/s. G.N.Rubbertech Pvt. Ltd. Through a purchase contract and documented transactions, M/s. Libas India was found to have facilitated the misuse of the EOU Scheme. Investigations confirmed that the exports shown by M/s. Libas India to Bangladesh were not in line with actual imports into Bangladesh. The DRI investigations conclusively established M/s. Libas India's involvement in abetting the evasion of customs duty. Ultimately, the Appellate Tribunal upheld the penalty imposed on M/s. Libas India, stating that they were rightly penalized for their role in facilitating the evasion of customs duty. The impugned order was sustained concerning the penalty on M/s. Libas India, and the appeal was rejected accordingly.
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