2018 (6) TMI 347 - AT - Customs

Principle of jurisprudents - KVS Scheme - blanket immunity - Penalty u/s 112B on co-noticees - violation of import conditions - misuse of the exemption extended vide Sl. No.30 of Notification No.21/2002-CU - Held that - The act committed by three of the present appellants is an act in addition to that as were committed by the remaining Noticees the appellants cannot be entitled for the blanket immunity. Otherwise also the immunity from prosecution has not been granted even to Mr. Lalit Goyal, the Proprietor of main Noticee M/s. Pioneer Soap and Chemicals. The penalty has simultaneously been imposed upon the remaining Noticees/ applicants of 127 B Customs Act. In addition, the Settlement Commissioner has granted liberty to the Revenue to take the appropriate action against the remaining Noticees i.e. the appellants herein. The benefit of KVS Scheme cannot suo moto be extended to the appellants - appeal dismissed - decided against appellant.

Issues:
1. Imposition of penalty under Section 112 B of the Customs Act on the appellant.
2. Allegations of misusing exemption and diverting crude palm oil to the open market.
3. Settlement Commission's decision and its impact on co-noticees.
4. Interpretation of Settlement Commission's order and liability of co-noticees.
5. Blanket immunity for co-noticees under the KVS Scheme.
6. Examination of the acts committed by co-noticees for separate penal consequences.

Analysis:
1. The appellant, M/s.A.V. Agro products limited, challenged the imposition of a penalty of ?10,00,000 under Section 112 B of the Customs Act based on an Order in Original dated 6th May, 2010 by the Commissioner. The penalty was imposed due to alleged involvement in misusing exemptions and diverting crude palm oil to the open market, contrary to the intended purpose.

2. The case involved allegations of several co-noticees, including the present appellant, issuing fake documents to show the sale of washing soap without actual manufacturing or selling, and misdirecting crude palm oil to the open market by misdeclaring it as rice-bran oil. The main appellant, M/s. Pioneer Soap & Chemicals, was accused of the primary wrongdoing, with others alleged to have abetted in the commission of the offense.

3. The Settlement Commission's decision played a crucial role in the case, with the main appellant and six other noticees applying for settlement under Section 127 B of the Customs Act. The application was disposed of by imposing penalties on the six applicants without granting immunity from prosecution, subject to the payment of duties.

4. The judgment analyzed the Settlement Commission's order and the liability of co-noticees. It was observed that the immunity granted to the main appellant did not automatically extend to co-noticees, especially if they were found to have committed separate offenses or additional acts beyond what the main appellant was accused of.

5. The argument regarding blanket immunity for co-noticees under the KVS Scheme was examined. The Settlement Commission's decision not to grant immunity from prosecution to the main appellant indicated that such immunity was not automatically applicable to co-noticees, as each individual's liability had to be assessed separately.

6. The judgment emphasized that co-noticees could not claim blanket immunity if found to have committed separate offenses or additional acts beyond the main appellant's wrongdoing. The Settlement Commission's order did not automatically absolve co-noticees of liability, especially when their actions were distinct from those of the main appellant. Therefore, the appeal was rejected based on these considerations.

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