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TMI Blog2007 (7) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1962. The said penalties stand imposed upon the appellants on the allegations and findings that they aided and abetted one M/s. Amrit Laxmi Machine Works, Bombay in duty free imports against duplicate advance licences. 2. After hearing both the sides, we find that proceedings were also initiated against M/s. Amrit Laxmi Machine Works. However, the said noticee settled the dispute in Settlement Commission who vide its Order No. 38/2002 dated 5-9-2002 settled the case on terms that an amount of Rs. 15,94,565/- (Rupees fifteen lakhs ninety four thousand five hundred sixty five only) deposited by the said notice be appropriated towards the admitted duty liability along with interest at the rate of 10%. Immunity was granted to the said noticee from fine, penalty and prosecution. As such, it is the appellant's case that no penalty having been imposed upon the main offender, imposition of penalties upon them in terms of the provisions of Section 112 is not called for. It is settled law that co-accused cannot be vested with any higher penal consequences than main accused. By referring to various, Ld. Advocate has argued that main accused stand absolved of penal consequences, no qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by my learned sister Mrs. Archana Wadhwa, Hon'ble Member (Judicial). As I am not in a position to pursue myself to accept the same, I proceed to record a separate order. 5. The following are the facts and findings as per Commissioner's order which are relevant : (a) M/s. Amrit Laxmi Machine Works was a holder of an advance licence issued to them in November, 1996 enabling them import of 248 pieces of bearings valued at Rs. 9,22,110/- within the overall value of Rs. 50,05,468/- allowed for duty free import and they were required to export goods valued at Rs. 3,52,96,940/-. (b) There were certain amendments to the licence and M/s. Amrit Laxmi Machine Works imported two consignments in January, 1997 and August, 1998. Licencee discharged export obligation by February, 1997. Still there was balance value on the licence for Rs. 27 lakhs and the licence was not being utilized after August, 1998 by the said firm which was valid up to 21-5-1999. (c) One broker dealing in advance licences, by name, Shri Jitendra Vakharia and Shri Ashwin Mehta of M/s. Nippon Bearings Pvt. Ltd., Mohanlal H. Vora of M/s. Shalin Bearing Corporation were mainly instrumental in making a false representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Mr. Ashwin Shantilal Mehta 1,00,000/- 3. Nippon Bearing Pvt. Ltd. 50,000/- 4. Shalin Bearings Corporation 50,000/- 6. The proposed order of Ld. Member (Judicial) allows appeals of these persons on the ground that M/s. Amrit Laxmi Machine Works and its Director were granted immunity from penalties by the order of the Settlement Commission and relies on the judgments relating to Kar Vivadh Samadhan Scheme and a judgment of the Single Member Bench of the Tribunal. 7. At the outset, it is observed that Kar Vivadh Samadhan Scheme is a one time scheme, which is on a different footing from the provisions relating to Settlement of cases by the Settlement Commission. The nature of applicants, the nature of relief granted and the conditions governing the Kar Vivadh Samadhan Scheme are also significantly different from the scheme of Settlement Commission. 8. Further M/s. Amrit Laxmi Machine Works and its Director approached the Settlement Commission and cooperated with the Settlement Commission and received immunity as provided under the Act. The present appellants have not chosen to go to the Settlement Commission. 9. The proposal to set aside the penalti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses under the Customs Act can be considered to be identical to Kar Vivadh Samadhan Scheme justifying invocation of case laws under the Kar Vivadh Samadhan Scheme? 14. Whether M/s. Amrit Laxmi Machine Works and its Director played main role in the fraud or the others, namely, Shri Manharlal H. Vora, Mr. Ashwin Shantilal Mehta, Nippon Bearing Pvt. Ltd., Shalin Bearings Corporation are the main persons in the crime? 15. Whether treating the appellants as mere co-noticees waiver of penalty should be granted on the ground that M/s. Amrit Laxmi Machine Works and its Director have obtained immunity from penalty by the order of the Settlement Commission. 16. Whether order proposed by ld. Member (Judicial) or Member (Technical) should be endorsed? Sd/- (Archana Wadhwa) Member (J) Dated 5-3-2007 Sd/- (M. Veeraiyan) Member (T) 17. [Per : Jyoti Balasundaram, Vice-President]. - I have heard both sides on the difference referred to me. Duty demand in this case was confirmed against M/s. Amrit Laxmi Machine Works, who had filed 'he Bill of Entry for the goods in question. M/s. Amrit Laxmi Machine Works settled the dispute before the Settlement Commission in Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to such Bill of entry or shipping bill] a show cause notice has been issued to him by the proper officer; (b) the additional amount of duty accepted by the applicant in his application exceeds two lakh rupees :-------------" 20. The expression "case" has been defined in the Section 127A in the following manner : - 127A(b). - "case" means any proceeding under this Act or any other Act for the levy, assessment and collection of customs duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before a proper officer or the Central Government on the date on which an application under sub-section (1) of Section 127B is made : Provided that where any appeal or application for revision has been preferred after the expiry of the period specified for the filing of such appeal or application for revision under this Act and which has not been admitted, such appeal or revision shall not be deemed to be a proceeding pending within the meaning of this clause." It is thus clear that the settlement mechanism provides for a settlement of case. Section 127C deals with power and procedure of Settlement Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her co-noticees, under the provisions of Sec. 112 of the Customs Act. The final order of settlement passed by the Settlement Commission settled the case by determining the amount of duty payable and granted immunity to the importer and its director both from confiscation of goods as well as penal action. There is no finding in the said order of the Settlement Commission as to the liability of the imported goods to confiscation under Sec. 11. The director of the imported company was also accorded immunity as he had filed a separate application for grant of immunity in his capacity as a co-noticee. The appellants herein did not file any application before the Settlement Commission and they claimed that they were not even aware of an application having been filed by the importer before the Settlement Commission. To my mind, the consequence of final order of settlement passed by the Settlement Commission in the case of Amrit Laxmi is that the case, i.e. the show cause notice issued to the importer as well as the co-noticees (including the appellants) stood finally settled and closed. The scheme of settlement does not contemplate a situation where a case is settled partly for some appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the ld. Member (T) that the major role was played by the appellants herein and the importer had only played the subsidiary role. The question as to who played the main role is not relevant for the purpose of the present case. 26. The points of difference are therefore, are answered as under : - (a) While the provisions of KVS Scheme and those relating to settlement of cases under the Customs Act are not completely identical, the underlying objective in both the scheme is similar and it is for this reason that the case laws in respect of cases under KVSS including in the case of Onkar S. Kanwar do not become entirely irrelevant. (b) The question as to who played the main role is irrelevant for the reason that once the case is settled by the Settlement Commission, it is settled in its entirety and such a case then cannot be adjudicated qua other co-noticees. (c) The case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained and is set aside. (d) The order proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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