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TMI Blog2023 (8) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion - in the present case, the proceedings have been initiated (Show Cause Notice issued) invoking Section 58(3) of Customs Act, 1962. The immunity granted against prosecution under the Customs Act, 1962 will include, the above proceedings initiated under Section 58(3) also which has culminated in the order revoking the license issued to the appellant. Therefore the settlement of the dispute cannot be a ground for not renewing/revoking the license. Remission of duty - Shortage of goods at DFS of International airport, Goa - HELD THAT:- This matter after adjudication reached the Tribunal and the demand has been set aside. It was held by Tribunal in the case of M/S. FLEMINGO DUTY FREE SHOP PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ST, GOA [ 2018 (4) TMI 491 - CESTAT MUMBAI ] held that In the present case also, the appellant lost the entire value of the goods due to admitted theft. Therefore in such case duty cannot be demanded. Evasion of duty alleged at DFS, Vishakhapatnam - HELD THAT:- The same also reached Tribunal and vide order dated 06.11.2017 in the case of Flemingo (DFS) Pvt Ltd vs CC Vishakhapatnam the demand been set aside exonerating the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national Airport, the appellant was issued another Show Cause Notice demanding duty of Rs. 96,66,209 for the shortfall in warehoused goods. 1.4 Again, in April 2011, in the bonded warehouse at Chennai, goods (involving duty of Rs. 3,17,101) were stolen in an act of burglary. The appellant was asked to shift their warehouse to more safe and secure place inside the port premises. 1.5 The appellant was involved in forging and falsification of records to evade customs duty in the Vishakhapatnam port and Show Cause Notice was issued. The notice was adjudicated and duty was confirmed vide order 07/2011 dated 30.11.2011. The Private Bonded Warehouse license was cancelled. This order was stayed by CESTAT, Bangalore vide order dated 06.08.2012. 1.6 The license of the appellant impugned in this case was extended periodically on the basis of Hon ble High Court order till 07.07.2011. The appellant then vide letters dated 24.11.2011 and 08.02.2012 requested for extension/renewal of license. 1.7 The present Show Cause Notice dated 07.11.2011 was issued to the appellant to show cause as to why the request for renewal of license should not be rejected and also as to why their License ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed writ petition before the Hon ble High Court challenging this order of the Settlement Commission which was after a huge delay of one year. The Hon ble High Court vide order dated. 19.12.2009 held that the order passed by Settlement Commission is valid and does not suffer from any infirmity. The department then preferred writ Appeal No. 2036/2010 against such order. The writ appeal was dismissed vide order dated 03.07.2019, as being devoid of merits. 3.2. Meanwhile, the department suspended the Private Bonded Warehouse license (P-840) issued to the appellant by issuing a memorandum dated 03.10.2006 by invoking Section 58(3) of Customs Act, 1962. This memorandum was challenged by the appellant before Hon ble High Court by way of W.P. No. 1156/2007. The Hon ble Court granted interim stay and also directed the department to permit the appellant to continue their business. 3.3. In April 2011, goods involving duty amount of Rs. 3,17,701 was stolen from the appellant s warehouse in Chennai Sea Port premises. The appellant lodged police complaint, and later a not traceable certificate was issued by the Police. There was no involvement of the appellant staff. The department di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. Therefore there are no grounds to reject the request for renewal of license. The Learned Counsel prayed that the appeal may be allowed. 4. The Learned Authorized Representative Shri Harendra Singh Pal appeared and argued for the appellant. It is submitted that the appellant has admitted duty liability before the Settlement Commission which would prove that the appellant has evaded Customs duty. The allegations raised in regard to Goa and Vishakhapatnam are serious offences. In both incidents the original authority has upheld the demands on the ground that appellant has violated the Regulation and evaded Customs duty. Merely because the appellant succeeded in appeal it cannot be concluded that the appellant has not indulged in such forging and falsification of documents. It was not a single stray act of evasion of Customs duty. The appellant is not entitled to get the license renewed. The Learned Authorized Representative prayed that the appeal may be dismissed. 5. Heard both sides. 6. The issue to be decided is whether the order passed by the Commissioner denying the request for renewal of licencse and ordering cancellation of the Private Bonded Ware House License ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lve the tax disputes in a spirit of conciliation rather than litigation. It is a remedy (under Section 127A) provided under the Customs Act itself. It also expedites the payment of duty by not getting entangled in litigation. The Settlement Commission has power to grant immunity from prosecution and penalty. The immunity so granted can be withdrawn only by provisions of law. There is nothing to show that the immunity granted has been withdrawn by the Commission. The admission of duty liability before the Settlement Commission is for the purpose of settling the dispute. An applicant before the Commission cannot be put to an adverse situation in any other proceeding after the grant of immunity. Further, in the present case, the proceedings have been initiated (Show Cause Notice issued) invoking Section 58(3) of Customs Act, 1962. The immunity granted against prosecution under the Customs Act, 1962 will include, the above proceedings initiated under Section 58(3) also which has culminated in the order revoking the license issued to the appellant. Therefore the settlement of the dispute cannot be a ground for not renewing/revoking the license. 6.3. The second incident is the shortag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing heard. (3) Pending an enquiry whether a licence granted under sub-section (1) should be cancelled under clause (b) of sub-section (2), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may suspend the licence. A plain reading of the above would reveal that Section 58 stipulate that they are subject to the conditions prescribed in the licence and also subject to execution of warehousing bond under Section 59. One of the conditions of the licence and warehousing bond executed by the appellant is that the appellant shall insure the goods deposited in the warehouse against theft, pilferage, fire accident and other natural calamities, etc., at least for a value equal to the Customs duty by a warehousing insurance policy drawn in favour of the Commissioner of Customs. In the present case it is an admitted position that the appellant insured the warehoused goods for that part of the value representing Customs duty on the imported goods. Thus it is clear abidance of the terms and conditions of the warehousing licence issued under Section 58 of the Customs Act and the warehousing bond executed under Section 59. Having followed the terms and conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n though the same is otherwise liable to duty either on imported goods or manufactured goods but since the goods is not capable of being enjoyed by the owner either for his consumption or for sale and he looses the value which is much more than the duty, the owner of the goods should not be further burdened with duty. In the present case also, the appellant lost the entire value of the goods due to admitted theft. Therefore in such case duty cannot be demanded. 8. Further we find that in case of Sushil Kumar Kayan v. Assistant Collector of Customs, 1993 (68) E.L.T. 537 (Cal.), the Hon ble High Court held that no duty is payable on goods stolen from the bonded warehouse. Even in that case the facts do not show as to whether the duty of stolen goods was insured in favour of the Customs Department whereas in the present case the duty is adequately secured by way of insurance policy in favour of revenue. 9. In view of above discussion and facts we are therefore of the view that there is no ground to demand duty from the appellant and the demand is required to be set aside. We therefore set aside the impugned order and allow the appeal with consequential reliefs, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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