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TMI Blog2001 (9) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... 022.12 of the Schedule to Customs Tariff Act, 1975 attracting 25% basic customs duty, surcharge @ 10% and special additional duty of 4%, whereas the parts for manufacture of CT/e scanners attract 15% basic customs duty, 10% surcharge and 4% special additional customs duty. In both the cases, no additional customs duty was leviable. However, 15% basic customs duty is available in terms of Customs Notification No. 16/2000, dated 1-3-2000 subject to filing an end-use bond, undertaking to comply with the conditions given in the above said Customs Notification, namely (a) that the parts, or as the case may be, spare parts, will be used for manufacture or maintenance as the case may be of the specified medical equipment and (b) that the importer shall produce within three months or such extended period that the Deputy Commissioner or Assistant Commissioner may allow to produce, in the case of parts, a certificate from the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise as the case may be, having jurisdiction over the factory, manufacturing the specified medical equipments to the effect that the parts have been used for the manufacture of the specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alem and that they were not taken to the factory of the applicant for undertaking any manufacturing process. Notwithstanding the above, it is alleged that the applicant and other executives having full knowledge of the fact that complete scanners have been imported with optional accessories, have resorted to describe the goods as parts and also to furnish end-use bond in order to avail the exemption under the Customs Notification No. 16/2000, dated 1-3-2000 and the above attempt to clear the above two scanners in the manner aforesaid was only their maiden attempt. The SCN has further alleged the involvement in the fraudulent act by Shri R. Sreedhar, S. Nandakumar and Shri K. Balan of the CHA firm. Accordingly, the notice has proposed denial of the benefit under Customs Notification No. 16/2000 and demanding duty of Rs. 19,97,698/- short paid under Sec. 28(1)(b) of the Customs Act, 1962, besides proposing confiscation of the goods under Section 111(m) and Section 111(o) of the Customs Act, 1962. Interest equal to the amount of duty short paid has also been demanded under Section 28AB of the Customs Act, 1962. Proposal has also been made for imposition of the penalty on the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, the applicant have shown their earnestness by depositing the additional duty along with interest and also a further sum, to take care of the adjudication levies as insisted by the investigating authorities during investigation itself. 6. Dr. Santosh Kumar, Deputy Commissioner of Customs, ACC, Chennai who appeared for the Revenue, while confirming that no report has been sent in response to the copy of the application sent to them submitted that since the applicant has already paid the additional duty and also the interest and even a further sum to take care of the adjudication levies, no dispute as such is pending. The applications have been filed only to get immunities from prosecution, penalty and so on. He referred to the definition of Case given under Section 127A of the Customs Act, 1962 and said that since no dispute is pending, the case did not merit admission. However, he confirmed that the main applicant has filed Bills of Entry in respect of which the SCN has been issued and that the applications are not hit by provisions under Section 127 B(1) and (2) of Customs Act, 1962. 7. We have considered the above submissions and gone through the records available. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, assessment and collection of the customs duty, an application could be made for settlement of the case. In this case, the proper officer of customs has assessed the goods as per the disclosure made in the Bills of Entry i.e., treating the goods as parts, as declared and extending benefit of notification. Whereas, after investigation, the impugned notice has been issued for reassessment of the goods as complete equipments and not parts, thus leading to demand of more duty than paid initially. Until a conclusive finding is given on this, and duty quantified in adjudication (after going through the adjudication formalities), the assessment process is to be held as being in progress. If, for any reason, during such process, the amount is paid, it has to be taken as only a deposit, and cannot be said to be against any assessed levy, since the assessment is not complete. In fact, the very purpose of the SCN is only to complete the said process and adjust the deposit against quantification to be made in the adjudication order. It may be relevant to point out here that the importer/assessee is under no obligation to deposit any amount during investigation. 10. A Division Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government. 12. Further, Chapter XIVA of the Customs Act does not make any distinction with reference to stage when the amount is paid, so as to preclude such cases from being admitted. It is also a fact that in this case the investigating authorities have abrogated the role of adjudicating authority by collecting amounts representing duty, interest and even possible penalty. This is clearly without any legal authority. 13. One of the objectives of the settlement mechanism is to give a chance to an errant importer to turn a new leaf, by disclosing the additional customs duty payable and also the manner in which such duty has been evaded initially. By such disclosure, the Revenue also get to know the modus operandi. Thus, the process helps both the applicant and the Revenue in that, the former gets peace while the latter gets the revenue, and acquires knowledge on the modus operandi. Both save time and resources by opting for settlement, thus falling in line with the scope of the scheme of the settlement. 14. Further, the contention of the Revenue that the applicant having already paid the differential duty proposed in the show cause notice has approached the Commission only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3) of the same Section, where no instalment payment facility is extended, the applicant ..... shall within 30 days of the receipt of a copy of the order under sub-section (1) allowing the application to be proceeded with, pay the amount of additional duty admitted by him as payable and shall furnish proof of such payment to the Settlement Commission (emphasis supplied). 19. Sub-section (4) of the very same Section empowers extension of instalment facility. According to the said sub-section If the Settlement Commission is satisfied, on an application made under sub-section (1) that the applicant is unable for good and sufficient reasons to pay the amount referred to in sub-section (3), within the time specified in that sub-section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments, if the applicant furnishes adequate security for the payment thereof. (emphasis supplied). 20. Sub-section (5) of Section 127C also provides for levy of interest at 18% or such rate as may be specified by Board, Where the additional amount of customs duty .................is not paid by the applicant within the period specified or ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be easily recoverable from them in view of non-disclosure. This is a machinery provision geared to collect revenue for the Govt. Therefore, where it already stands discharged/paid, and hence collected, even at the time of filing the application, admission of the said application would not result in achievement of the goal of further recovery or collection of revenue to Govt. It would only enable the assessee to seek for, and secure, immunities, if allowed by the Commission. Obviously, the Settlement Commission can not be used as a vehicle for merely obtaining immunities, without any gain to Govt. in the form of additional revenue. 24. Of course, a larger view would be whether should immunity be available only if some due is pending as on the date of application, and should early payment at investigation stage penalize and deprive the party of the benefit of immunities. Such view would unnecessarily discourage early payment till approaching the Commission which is not in overall revenue interest. But in interpretation of a statute, the basic approach to be adopted is the one which would achieve the object of the provision [1999 (113) E.L.T. 761 (S.C.) IOC Ltd. v. Chief Inspector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer s views and contentions, if any, are properly taken into account before coming to decision and he is served with a speaking order to be able to contest in appeal if he so desires. The question is whether a duty chargeable under Section 12, ibid, and paid voluntarily by the importer without apparent dispute on its leviability as per the available records, becomes a non est (i.e., not a payment of duty) just because the procedure under machinery provision has not yet been gone through, or a levy or collection without authority of law. After all, a machinery provision is only an enforcing section laying down the manner of determining for enforcement the quantum of duty due and issue of appropriate orders therefore. That itself is not the charging section and cannot become a legal block for voluntary compliance and earlier payments, as compared to the date of completion of the procedure under machinery provision. If at all, it is only the importer who can challenge the levy or dispute the character of the amount/payments made by him as duty till the conclusion of the proceedings to demand duty under the machinery Section, and not for the Revenue to write it off as other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om snch person. The apparent purpose of this Explanation is that since the first proviso enables payment of 25% of the duty as penalty, only subject to the condition that the duty.........as determined under sub-section (2) of Section 28 .............is paid within 30 days from the date of communication of the order of the proper officer determining such duty...... , in terms of clause (ii) of the Explanation to Section 114A, any payment of duty made prior to the date of communication of order of determination of duty under Section 28(2) should not get affected adversely by the clause paid within 30 days from the date of communication of the order of the proper officer determining such duty , to extend the benefit of paying only 25% of duty as penalty. I find that, as already observed in the earlier para 7 of this (my) order, the various sub-sections of Sections 127B(1) and 127(C) laying down the condition of acceptance of by applicant, additional amount of customs duty and payment of the additional duty admitted within 30 days of the receipt of copy of admission order issued by the Settlement Commission or within any extended period, do not a provide saving clause to the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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