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2023 (8) TMI 17 - AT - CustomsRenewal of warehouse license - Private Bonded Ware House License - Settlement Commission granted immunity from prosecution and penalty - Clandestine removal of goods - shortage of goods - forged documents and false declarations was that the signature did not tally with the signature of the crew in the declaration with Department - maximum evasion of duty alleged was on the basis that signature of buyers did not tally with the signature available with the department - remission of duty - HELD THAT - The Settlement Commission provides for an alternate dispute resolution mechanism for taxpayers who wish to resolve the tax disputes in a spirit of conciliation rather than litigation. It is a remedy (under Section 127A) provided under the Customs Act itself. It also expedites the payment of duty by not getting entangled in litigation. The Settlement Commission has power to grant immunity from prosecution and penalty. The immunity so granted can be withdrawn only by provisions of law. There is nothing to show that the immunity granted has been withdrawn by the Commission - in the present case, the proceedings have been initiated (Show Cause Notice issued) invoking Section 58(3) of Customs Act, 1962. The immunity granted against prosecution under the Customs Act, 1962 will include, the above proceedings initiated under Section 58(3) also which has culminated in the order revoking the license issued to the appellant. Therefore the settlement of the dispute cannot be a ground for not renewing/revoking the license. Remission of duty - Shortage of goods at DFS of International airport, Goa - HELD THAT - This matter after adjudication reached the Tribunal and the demand has been set aside. It was held by Tribunal in the case of M/S. FLEMINGO DUTY FREE SHOP PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ST, GOA 2018 (4) TMI 491 - CESTAT MUMBAI held that In the present case also, the appellant lost the entire value of the goods due to admitted theft. Therefore in such case duty cannot be demanded. Evasion of duty alleged at DFS, Vishakhapatnam - HELD THAT - The same also reached Tribunal and vide order dated 06.11.2017 in the case of Flemingo (DFS) Pvt Ltd vs CC Vishakhapatnam the demand been set aside exonerating the appellant. From the facts placed, the allegations raised in the Show Cause Notice are no longer live or exist. In such circumstances from the discussions made above, the department cannot deny the request for renewing the license. So also the order for cancellation of the license cannot survive. The impugned order is set aside. The appeal is allowed.
Issues Involved:
1. Clandestine Removal of Goods at Chennai Sea Port 2. Shortfall in Warehoused Goods at Goa International Airport 3. Burglary Incident at Chennai Bonded Warehouse 4. Evasion of Customs Duty at Vishakhapatnam Port 5. Renewal and Cancellation of Private Bonded Warehouse License Summary: 1. Clandestine Removal of Goods at Chennai Sea Port The appellant, M/s Flemingo DFS Pvt Ltd, was accused of clandestine removal of goods by forging documents and making false declarations, leading to a revenue loss of Rs. 3.88 crores. A Show Cause Notice was issued on 10.01.2007. The appellant approached the Settlement Commission, which settled the duty liability at Rs. 82,25,502.45, granting immunity from fines, penalties, and prosecutions. The High Court upheld this settlement, dismissing the department's writ appeal. The Tribunal held that the settlement of the dispute cannot be a ground for not renewing or revoking the license. 2. Shortfall in Warehoused Goods at Goa International Airport A Show Cause Notice was issued demanding Rs. 96,66,209 for a shortfall in warehoused goods at the appellant's Duty Free Shop at Goa International Airport. The Tribunal, in 2018 (361) E.L.T. 742 (Tri-Mumbai), set aside the demand, holding that the theft incident did not occur due to any improper removal of goods by the appellant. The Tribunal emphasized that the appellant had insured the goods for customs duty, thus no duty could be recovered from them. 3. Burglary Incident at Chennai Bonded Warehouse In April 2011, goods involving a duty amount of Rs. 3,17,701 were stolen from the appellant's warehouse in Chennai. The appellant lodged a police complaint and received a 'not traceable certificate.' There was no involvement of the appellant's staff. The department directed the appellant to shift the shop to a more secure area, which was complied with. 4. Evasion of Customs Duty at Vishakhapatnam Port The appellant was accused of evading customs duty by forging and falsifying records at their Duty Free Shop in Vishakhapatnam Port. After adjudication, the demand was confirmed, but upon appeal, the Tribunal in 2018 (363) E.L.T. 450 (Tri-Hyd) set aside the duty demand and ordered the restoration of the appellant's license within one month. 5. Renewal and Cancellation of Private Bonded Warehouse License The appellant's license was periodically renewed based on High Court orders until 07.07.2011. The present Show Cause Notice dated 07.11.2011 proposed to reject the renewal request and cancel the license. The Commissioner of Customs denied the renewal and ordered the cancellation of the license. The Tribunal found that all allegations raised in the Show Cause Notice had been resolved in favor of the appellant, thus there were no grounds to deny the renewal or cancel the license. Conclusion The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs. The order pronounced in open court on 31.07.2023, concluded that the department could not deny the renewal request or cancel the license based on resolved allegations.
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