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TMI Blog2002 (1) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... port obligation imposed on the applicant was Rs. 26,22,88,560/-. The applicant could effect exports worth Rs. 4,50,62,330/- only due to the extremely difficult conditions faced by the polyester industry on account of the glut in the international market. 3. A total duty amount of Rs. 1,66,71,217/- + interest was demanded by the Assistant Commissioner of Customs, EPCG Group, New Custom House, Mumbai vide Duty Demand Notice No. S/40-SPL-71/95 VA, dated 31-7-1998 and No. S/40-SPL-388/94 VA, dated 7-8-1998 against Bills of Entry No. 4157, dated 10-1-1995 and No. 11547, dated 30-4-1994 respectively. 4. The applicant filed an application on 30-3-2000 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. 1,23,81,895/-. 5. The Hearing for admission of the case was held on 10-5-2000. During the hearing, the Learned Advocate of the applicant submitted that there is an error in the calculation of actual amount of duty payable. Considering the export obligation performed so far, the obligation for payment of duty would be in the region of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced to Rs. 1.2 Crores. In respect of loan taken from Industrial Development Bank of India, the Applicant had paid only interest and the principal amount is yet to be paid. The Applicant has sold all lands and plants to raise the loan amount. He prayed to the Commission that the Applicant be allowed to pay duty liability of Rs. 1,23,81,895/- in four equal quarterly instalments with first instalment of Rs. 20 Lakhs within one month of date of receipt of the order and for waiver of interest on the duty liability. The Revenue stated that the Applicant was given two personal hearings but he did not appear and submit export obligation discharge certificate. Though there is no provision for charging of interest on duty in the notification but according to Legal Agreement Undertaking executed by the Applicant and incorporated in the licence issued to them, the same can be charged. The Commission asked the learned Departmental Representative whether the case is fit to be admitted or not. The learned Departmental Representative replied that the application should not be admitted, since the applicant did not disclose any new duty liability which was not known earlier, the application sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicant has failed to fulfil the export obligation, that the bank guarantee be forfeited and the demand draft for the entire amount be sent to the Assistant Commissioner of Customs. 13. The Applicant has availed the benefit of duty concession in terms of Notification No. 160/92-Cus. by observing conditions (i) to (ii) contained therein. Referring to sub-section (9) of Section 127C he stated that the settlement could be totally effective if the DGFT and Bank are restrained from enforcing the bank guarantees executed by Applicant till the application is finally decided by Commission. The learned Consultant submitted last 5 years balance sheets. He drew attention of the Commission to headings Working Results and Land and Building in Directors' Report to the Shareholders of 7th Annual Report - 1999-2000. He stated that the Applicant has sold his land and building and in such a situation it is not possible for the Applicant to pay entire admitted liability. He undertook to pay the balance amount of admitted liability as soon as the bank guarantee is released by the bank. On certain clarifications sought by the Commission on expenditure, loans, investment etc. the learned Consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g was held on 15-2-2001. The learned Advocate for the Applicant submitted that the admitted duty liability is Rs. 1,16,49,093/-. Earlier he had shown the admitted duty liability as 1,23,81,895/-. The learned Advocate also submitted that the deemed export and export made under DEEC were also to be taken into consideration for the satisfaction of export commitment. In this connection the learned Advocate submitted an extract of Export and Import Policy (1st April 1997-31st March, 2001). This is for buttressing the point that export through 3rd party and export made under DEEC scheme are also taken into account. The Representative of Revenue submitted that the Applicant has to provide legible certified copy of Shipping Bills since the Shipping Bills given by him were not legible. The Applicant was informed during the hearing that 79 Shipping Bills, 12AR3s/invoices are involved and legible certified copy should be given to the Revenue on 19th February 2001. The Revenue was directed to scrutinise the documents and submit a detailed report to the Commission on or before 26-2-2001. In their report the Revenue also should give their views as to why the duty amount admitted by the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permission would be entitled to adjustment having regard to the words of the notification of 11th August 1975, that until permission of renewal is granted by the Deputy Commissioner of Commercial Taxes, the new industry should not be allowed to adjust the refunds . The contention virtually means this "No doubt you were eligible and entitled to make the adjustments. There was also no impediment in law to grant you such permission. But see language of Clause 5. Since we did not give you the permission you cannot be permitted to adjust. Is this the effect of law? 22. He also submitted a copy of Export Promotion Capital Goods Scheme from the Handbook of Procedure under which it is mentioned that whenever the applicant has availed the facility of discharging export obligation through third party, the exporter shall mention the name of licence holder, the EPCG Licence number. The ld. Advocate contended that his is a direct export. With reference to monitoring of export performance with reference to changes brought out to Notification of 1995, it was argued by the ld. Advocate that the exports pertain to June 1995 to 1999, the licence were issued prior to July 1994, the amendment c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortfall was to be determined by DGFT, New Delhi, they told him that the computation has to be done in US$ and not in Indian Rupees. The applicant submitted that he agrees with the correct contention of DGFT after going through his commitment in detail. Ultimately, he agrees with the DGFT s computation of total duty and agrees to pay Rs. 1,21,90,562/-. He has already paid Rs. 1,16,49,093/-. The balance duty payable by him is Rs. 5,41,469/-. 25. The Commission has gone through the case records and submission made by the applicant and the Revenue. 26. It is seen from the case records that the applicants have admitted a duty liability of Rs. 1,23,81,895/-. However, the applicant filed a miscellaneous application and revised the admitted duty liability to Rs. 1,16,49,093/-. On the basis of the said revised application, the applicant has made the following payment : Total admitted duty liability Rs. 1,16,49,093/- Paid as per Commission s Order dt. 8-6-2000 Rs. 20,00,000/- Rs. 96,49,093/- Encashment of Bank Guarantee Rs. 83,51,000/- Paid as per Commission s Order dt. 23-8-2000 Rs. 12,98,093/- 27. The appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in relation to deemed exports, third party exports etc. and has calculated his liability in terms of Indian Rupees instead of US $. 30. It is seen that the Customs authorities have demanded a duty of Rs. 1,66,71,217/- vide Show Cause Notice No. S/40-SPL-388/94 VA, dt. 7-8-98 and Show Cause Notice No. S/40-SPL-71/95 VA, dt. 31-7-98 against two Bill of Entries. However, the Revenue vide their letter F. No. S/40-SPL-71/95/EPCG// S/26-104/95/EPCG, dt. 26-2-2001 has inter alia enclosed a copy of the calculation. According to the said calculation of the Revenue the liabilities are as follows : (A) Differential duty payable : Rs. 1,49,39,415/- (B) Export Commitment : Rs. 26,22,88,560/- (C) Export performance : Rs. 4,57,50,561/- (D) Export Shortfall : Rs. 21,65,37,999/- (E) Duty Payable : Duty concession x Export shortfall Export commitment = Rs. 1,49,39,415 x Rs. 21,65,37,999 Rs. 26,22,88,560 = Rs. 1,23,33,557/- 31. The applicant has accepted a liability of Rs. 1,21,90,562 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the instant case, inasmuch as there is no full and true disclosure by the applicant as evident from the letter of the DGFT cited elsewhere. In view of this the penalty of Rs. 50 lakhs is imposed on the applicant. (c) The applicant has co-operated with the Settlement Commission and has also paid the duty admitted at different stages. The Commission extends immunity from prosecution under the Customs Act, 1962, the Indian Penal Code (45 of 1860) and the Foreign Trade (Regulation) Act on the matters covered in this application. (d) The imports have taken place under the Scheme of EPCG as applicable vide Notification No. 160/92, wherein there is no provision for charging of interest. The CEGAT s Order No. C.1/4307, dt. 19-12-2000 [2001 (137) E.L.T. 697 (T)] in the case of Philips (India) Ltd. v. Commissioner of Customs also support this contention. The Commission has also taken a similar view in the case of M/s. Rajashri Plastiwood Ltd. (Order No. 3/Cus./2001, dt. 23-3-2001) - 2001 (130) E.L.T. 295 (Sett. Comm.). Therefore the applicant is given immunity from charging of any interest under the Customs Act, 1962. (e) The applicant has requested vide his letter, dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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