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TMI Blog2001 (10) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... tner of M/s. Jayashree Plastic Enterprises, Shri B.M. Thanki, Partner of M/s. Jayashree Plastic Enterprises, M/s. Jayashree Plastic Enterprises and M/s. Rainbow Polystraps (P) Ltd. 2. The brief facts of the case are as follows : M/s. Vishal Exports Overseas Ltd, Ahmedabad (hereinafter referred to as the applicant) was a star trading house engaged in import/export of various products including frozen fish and fish products under DEEC Scheme. The applicant was granted 7 Advance licences for the duty free import of polymers and other exempt materials against the export obligation of fish and fish products. 3. On the basis of intelligence that exempt materials viz., polymers of various types and grades, vitamins etc. were being imported duty free against the advance licences issued for the export of fish and fish products and that such exempt materials were not actually being used in the fulfilment of export obligation, the officers of Customs Preventive Commissionerate had initiated the investigation into duty free imports by the applicant effected against the advance licences issued to him. 4. Detailed investigation conducted at Mumbai, Porbunder and other connected places re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the processed goods were supposed to be supplied to various fish exporters/shippers for using the same in their exports. It was further revealed that the agreement between the applicant and M/s. Alpha Impex Services was a fabricated document. The investigation further revealed that the real agreement with M/s. Alpha Impex Services was for procuring export performance only. The fish exporters/shippers also denied having received any goods either from the applicant or from M/s. Alpha Impex Services. Even as per their contract with the applicant there was no provision/condition for the supply of exempt material or goods processed by the applicant to them. The so-called supporting manufacturers had neither received the exempt materials nor were they equipped for processing the exempt materials imported by the applicant. Further, various documents including the transport receipts, job work invoices and bills were found fabricated in respect of approx. 900 MTs to indicate their transportation and utilization as required in terms of the conditions of advance licences and the said exemption notification. An approx. quantity of 246 MTs of exempt polymers were admittedly diverted and utiliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l deposit of Rs. 5 lakhs towards appropriation of additional duty payable by the applicant, if so, determined by the Hon ble Commission . 9. The Commission, vide interim order dated 31-3-2000, observed that as it was considering the case for admission or otherwise and as the case was not being finalised at that stage, in that view of the matter, it could not determine whether any additional deposit should be made by the applicant. The Commission after perusal of the application filed by the applicant, the case records, the submissions of the applicant and Revenue, allowed the application to be proceeded with under Section 127C of the Customs Act, 1962. The Commission directed that the applicant should deposit the admitted amount of Rs. 45,28,000/- within 30 days of the receipt of the order. 10. The applicant vide application dated 2-5-2000 stated that he was suffering from acute financial hardship, and also brought to the notice of the Commission that he had already deposited a sum of Rs. 58,31,000/- during the course of investigation. He was, therefore, not in a position to deposit the additional amount of Rs. 45,28,000/- immediately. However, in partial compliance of the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue whether he had any objection to the request of the applicant regarding payment of the balance admitted liability of Rs. 35,28,000/- in instalments @ Rs. 5 lakhs per month. The Representative of the Revenue had no objection to the said request of the applicant. 16. The Commission, vide interim order dated 23-6-2000 ordered that the balance amount of Rs. 35,28,000/- should be paid by the applicant in equal instalment of Rs. 5 lakhs per month and the remaining amount of Rs. 28,000/- in the last month. 17. The next hearing of the case was held on 10-10-2000. No one appeared for the applicant. The Commission, vide interim order dated 10-10-2000, fixed the next date of hearing on 12-2000 with the direction that if either of the party failed to turn up it would deem to be non co-operation in the proceedings before the Commission and the matter would be decided on the merits of the case. 18. The next hearing of the case was held on 12-12-2000. During the hearing, the learned Advocate of the applicant argued that his admitted duty liability was Rs. 45,28,000/- and he had already deposited Rs. 58,31,000/-towards CVD with the Department. Out of the admitted duty liability he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Shri Pradeep S. Mehta was held on 10-1-2001. The Commission, vide interim order dated 17-1-2001 allowed the application to be proceeded with in terms of sub-section (1) of Section 127C of the Customs Act, 1962. 20. Shri Vasantlal T. Vithlani, Proprietor of M/s. Alpha Impex Services, Shri M.A. Thanki, Partner of M/s. Jayashree Plastic Enterprises, Shri V.A. Thanki, Partner of M/s. Jayashree Plastic Enterprises, Shri B.M. Thanki, Partner of M/s. Jayashree Plastic Enterprises, M/s. Jayashree Plastic Enterprises and M/s. Rainbow Polystraps (P) Ltd. and also co-noticees in the instant show cause notice filed applications on 5-1-2001. The next hearing was held on 25-1-2001. During the hearing, the Representative of the Revenue explained that S/Shri M.A. Thanki, V.A. Thanki and B.M. Thanki were partners and they had also aided and abetted the applicant firm for fabrication of documents. Shri Vasantlal T. Vithlani had played a major role being Proprietor of M/s. Alpha Impex and proposed the names of M/s. Jayashree Plastic Enterprises and M/s. Rainbow Polystraps (P) Ltd. as supporting manufacturers to Shri Pradeep Mehta. The Commission, vide interim order dated 31-1-2001, allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, there was no dispute regarding calculation of Basic Customs Duty on the said amount imported duty free under the Advance Licence Scheme. In fact, the applicant had admitted and was willing to pay the whole of CVD worked out by the department. The CVD worked out by the department was Rs. 97,14,723/-. The applicant s only contention was that the Basic Customs Duty of Rs. 98,36,757/- was not payable by the applicant because the applicant was issued licences under Notification No. 79/95-Cus., dated 31-3-1995. He further argued that the 7 Value Based Advance Licences were issued under Notification No. 79/95-Cus., dated 31-3-1995 whereby the applicant was required to pay only the CVD and the Basic Customs Duty on the exempt material was exempted from payment. It was pointed out to the ld. Advocate by the Commission that when the applicant had sought amendment of his 7 advance licences from Value Based Advance Licences under Notification No. 79/95-Cus., dated 31-3-1995 to 19-9-1995 as amended by Notification No. 71/96-Cus., dated 10-9-1996, the applicant would be governed by the terms and conditions as provided under the latter notification. The ld. Advocate agreed that the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity from prosecution and from imposition of any penalty, fine, interest etc. 25. Further, Shri Pradeep S. Mehta, the Managing Director of the applicant firm made a written submission before the Commission that apart from the submissions made by the Advocate today and in the earlier hearings also prayed that the Hon. Settlement Commission be pleased to condone/pardon all the omissions and commissions committed knowingly or unknowingly and he assured the Commission that the same shall not be repeated in future and added that for the act of kindness all of them shall ever remain highly obliged for ever. 26. The Revenue was represented by Shri Shaikh K.A., Appraising Officer of Customs (P), Mumbai. 27. The Revenue submitted that since the Applicant was ready to admit the entire duty liability, Revenue had nothing to add further in the case. 28. After going through the applications, relevant records, the submissions of the ld. Advocate and the Revenue, the Commission found that the applicant had agreed to admit and pay the duty liability of Rs. 1,95,51,480/- as per the findings of the Commission. The applicant had already paid Rs. 1,03,59,000/- (Rs. 58,31,000/- before admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per annum from the date of clearance of the exempt material to the date of the final payment instead of interest @ 24% per annum as provided for in the said notification. This interest shall be paid by the applicant on the full amount of duty i.e. Rs. 1,95,51,480/- within 30 days (thirty) from the receipt of this order. (D) Prosecution : The applicants are also given immunity from prosecution under the Customs Act, 1962 and the Indian Penal Code (45 of 1860). (e) Revenue is directed to nullify the entries made in the DEEC Books so that the applicant may approach the DGFT for revalidation of Advance Licences. 31. Immunity granted to the applicant as discussed above shall stand withdrawn if the applicant fails to pay either the balance amount of duty of Rs. 91,92,480/- in monthly instalments as provided supra or to execute the Bank Guarantee for Rs. 76,60,400/- as specified in this order of settlement. 32. This order of settlement shall be void if it is subsequently found by the Settlement Commission that this settlement has been obtained by fraud or misrepresentation of facts. Corrigendum to Final Order No. 30/2001-Cus., dated 29-10-2001 Passed in the case of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Kandla Customs a sum of Rs. 10,90,562/- being duty amount for the clearance from Kandla Port as well as interest thereupon. These submissions were also made by the applicant in the hearing held on 11-12-2001. The Commission, vide interim order dated 14-12-2001, directed the Revenue to cross-check the calculation prepared by the applicant. Revenue was also directed to calculate interest at 10% instead of 24% as per Notification No. 149/95-Cus., dated 19-9-1995 on the entire duty. Revenue vide their report dated 23-1-2002 have clarified that while the applicants have made full payment towards balance admitted duty in respect of imports made at Mumbai Port, while working out the interest at 10% from the actual date of clearance, it is observed that the same has been calculated on the basis of CIF value of the goods and not on the basis of assessable value of the imported goods. As a result, the applicant is liable to pay additional amount of interest of Rs. 5,38,847/- involved on duty amount in respect of imports made at Mumbai. Similarly, the applicant is required to pay additional amount of Rs. 35,853/- on account of the balance admitted duty for goods imported at Kandla and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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