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TMI Blog2001 (8) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... igence received by the officers of Directorate of Revenue Intelligence, New Delhi that the applicants were importing electronic components from Hong Kong and Taiwan by underinvoicing and evading huge amount of Customs duty, the business and residential premises of the applicant firm and Directors of the applicant firm were searched. Certain documents were seized on 19-5-1998 during the search operation. 4. A show cause notice dated 11-6-1999 was issued to the applicant by the Commissioner of Customs (Import), Mumbai demanding Customs duty of Rs. 28,91,400/-. 5. The applicant filed an application on 5-6-2000 under Section 127B of the Customs Act, 1962 before the Additional Bench of Settlement Commission, Mumbai, for the settlement of his case. In his application, he disclosed and admitted duty liability of Rs. 4,60,078/-. 6. The hearing for admission of the case was fixed on 9-8-2000. During the hearing, the learned Advocate of the applicant referred to the submissions made in the case of M/s. Paul Industries (India) held on the same date prior to this case and stated that the same facts are applicable in this case too because same show cause notice has been issued to both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence these documents cannot be taken for the purpose of consideration. The Revenue requested for some time to verify the genuineness of the documents filed by the applicant. The Commission allowed two months time for verification of the said documents. 13. The Commission asked the Revenue to come prepared with the following at the next hearing :- (1) Revenue has to check up the genuineness of the two documents submitted by the applicant as proof of payment towards freight and insurance. (2) The applicant is admitting a liability of Rs. 41,62,860/- while the SCN amount is Rs. 53,97,827/-. What will be the correct amount according to the Revenue and it has to produce evidence to that effect. (3) Revenue has to submit to the Commission whatever correspondence made with the Hong Kong Customs and their reply to DRI, Mumbai in respect of this case. (4) No Show Cause Notice has been issued to the other two importers. Why department has accepted the imports made by these two parties and not issued any SCN to them? (5) The Revenue has to produce comparable charts. 14. The Commission further directed that the Revenue shall send a copy of their report to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd insurance are taken into account then the duty liability works out to Rs. 4,62,689/-. 3. As regards the third direction of the Commission, the Revenue submitted that copy of all the correspondences made with Hong Kong Customs and their reply to DRI Mumbai have already been supplied to the Commission along with the report dated 21st May, 2001. 4. Regarding the fourth direction of the Commission, the Revenue submitted that attempts were made to gather evidences with regard to the consignments supplied by M/s. Excel World, Hong Kong and Ausfield International Ltd., Hong Kong to the Applicant. However, the Revenue could not get any evidence against such imports. Hence, in the absence of any evidence, the Revenue thought it appropriate not to issue show cause notice for those imports made by the Applicant. 5. Regarding the fifth query, the Revenue submitted that a comparative chart has been submitted to the Commission vide its letter dated 21st May, 2001. 19. The ld. Advocate of the Applicant submitted that the Applicant had already accepted the full duty demanded by the Revenue in case of 3 Bills of Entry for which the Revenue had the evidence of FOB value of export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re no export declarations. However, he requested the Commission to grant the Applicant some time to furnish a detailed working for this admitted amount. 24. The Commission directed the Applicant to file a detailed working sheet in respect of additional duty liability concerning the 7 Bills of Entry for which there were no export declarations within seven days. The Applicant, through his Advocate, by a letter dated 14th June, 2001, inter alia, submitted that they are agreeable to pay Rs. 3,00,000/- to close the issue in the spirit of settlement. This amount of duty, it is seen from the letter, is worked out on the basis that the lowest export value in the export declaration should have been adopted in the case of Populated P.C.B. 25. It is in this background that the Applicant has worked out his additional duty liability in respect of 7 Bills of Entry by taking the lowest export value of PCB which comes to Rs. 2,31,662/-. On account of actual freight, insurance and landing charges value will increase by 11% and the duty on this will be Rs. 25,482.82 and the total amount of duty involved would be Rs. 2,57,144.82. In this backdrop the Applicant says in the spirit of settlement the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as he was the importer. It is seen that the Applicant has not come with true and full disclosure instead the Applicant and for reasons known to him, has offered to pay Rs. 3,00,000/- as settlement of duty for the 7 Bills of Entry. 32. Under the above circumstance, the terms of settlement are as under : - The Applicant with reference to the 3 Bills of Entry had accepted an additional duty liablity of Rs. 4,60,078/-. As per the Revenue, the duty liability of the Applicant comes to Rs. 4,62,689/-. While perusing the records, it was noticed that the duty with reference to these 3 Bills of Entry should be Rs. 4,66,827/- and not Rs. 4,62,689/- which was due to arithmetical error. Since the Applicant has admitted to pay the entire duty liability for the 3 Bills of Entry as worked out by the Revenue, it is now ordered that the Applicant should settle the case by paying Rs. 4,66,827/- with reference to the 3 Bills of Entry. Even though the Applicant at the first instance submitted that no duty liability arises in the case of 7 Bills of Entry yet, later on during hearing and also in its letter the Applicant had admitted the duty liability of Rs. 3,00,000/- with an intention to settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - has already been confirmed by the Commission. Considering the arguments of the applicant and the Revenue and after going through the relevant records the Commission observes that there has been remiss on the part of the applicant as far as admission of duty liability is concerned. Therefore, the Commission feels that a penalty needs to be imposed on the applicant. The Commission imposes a penalty of Rs. 1,00,000/- (Rupees One lakh only) under the provisions of sub-section (1) of Section 127H of the Customs Act, 1962 which he should pay within 30 (thirty) days of receipt of a copy of this order. Immunity granted to the Applicant as discussed above shall stand withdrawn if the Applicant fails to pay the duty and penalty specified in this order of settlement. The terms of settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts. 33. Attention of all concerned is drawn to sub-section (3) of Section 127H of the Customs Act, 1962. All concerned should be informed accordingly. Copy of this order may be sent for publication by following the prescribed procedure. - - TaxTMI - TMITax - C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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