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2019 (11) TMI 1038 - AT - CustomsLiability of interest under section 28AB of Customs Act, 1962 - Imposition of penalty u/s 114A of CA - duty liability has been fastened on the transferor of tradeable scrip - HELD THAT - The liability of transferees, limited to detriment of interest and penalty, when acceptance of application for settlement, under a statutory process that is restricted to only to specified persons, implicitly declares such person to be liable to duty within the meaning of section 28 of Customs Act, 1962 has not been adjudicated upon in the impugned order. In the absence of any finding, we are unable to subject the said order to the test of being legal and proper. In order that the adjudication proceedings be completed, we set aside the impugned order and remand the matter back to the original authority for a fresh decision in accordance with law - appeal allowed by way of remand.
Issues:
Applicability of sections 28AB and 114A of the Customs Act, 1962 on duty liability transferred under tradeable scrip. Analysis: The appeal by M/s Graphite India Ltd challenges the order-in-original by the Commissioner of Customs disputing the charging of interest under section 28AB of the Customs Act, 1962 and penalties under section 114A on duty liability paid by M/s Rajat Pharmachem Ltd. The central issue is the applicability of these provisions when duty liability is fastened on the transferor of tradeable scrip. The appellant imported goods against various bills of entry at different customs houses against scrips issued under the Duty Entitlement Passbook scheme to M/s Rajat Pharmachem Ltd. The duty liability on these imports was settled by the Central Excise & Customs Settlement Commission, granting immunity from penalty and prosecution. Subsequent proceedings focused on interest under section 28AB and penalties under section 114A on the transferees. The impugned order acknowledged the settlement but excluded interest due based on a High Court decision limiting recovery to the "importer" defined in the Customs Act, not other persons. The High Court decision addressed liability for duty foregone on imports made by transferees of licenses, excluding recovery from the exporter. The Settlement Commission's observations on interest liability did not absolve the adjudicating authority from determining the transferees' liability under the relevant provisions of the Customs Act. The Tribunal considered the appellant's arguments in light of a previous order involving a transferee and a High Court judgment dismissing a similar appeal by Revenue. The liability of transferees for interest and penalty, when part of a settlement application restricted to specific persons, implies their liability for duty under section 28 of the Customs Act. The impugned order failed to adjudicate on this crucial aspect, leading to the inability to assess its legality and correctness. Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision in compliance with the law. This decision was made to ensure the completion of adjudication proceedings and proper determination of liability under the Customs Act. In conclusion, the judgment delves into the intricacies of duty liability transfer under tradeable scrips and the applicability of relevant provisions of the Customs Act, emphasizing the need for a thorough assessment of liability and adherence to legal procedures in settlement applications and adjudication proceedings.
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