Inter alia, observing that though the appellant had number made a full and true disclosure of their duty liability but had companyperated with the Settlement Commission, the Settlement Commission waived penalty in excess of Rs.18 lakhs and granted total immunity to the appellant from prosecution.
Accordingly, vide order dated 24th September, 2001, the Settlement Commission directed the Commissioner to submit his final report along with the relevant material to establish that the goods imported by the appellant were actually sold to M s Elektronik Lab.
It was also pointed out that the rates of the spare parts charged by M s Elektronik Lab to the ship owners for the same items were higher than those charged by the appellant from them, which undisputedly showed the value addition.
On the basis of the intelligence gathered, premises of the appellant were searched by the officers of the Customs Commissionerate, Mumbai in December, 1997, resulting in the recovery of incriminating documents.
Aggrieved, the appellant preferred an appeal to the erstwhile Customs, Excise and Gold Control Appellate Tribunal.
Being dissatisfied with the order passed by the Settlement Commission, the appellant took the matter to the High Court by preferring the aforementioned writ petition.
The stand of the Commissioner was that since M s Elektronik Lab, who had purchased the imported spare parts from the appellant for the purpose of fitting on board the ships of the said three shipping companypanies, was number registered with the Director General of Shipping, they were number eligible to claim benefit of exemption Notification, and, therefore, they routed the imports through the appellant and further, since the spare parts imported for carrying out repairs of the ships were number actually used by the appellant and had been sold to M s Elektronik Lab prior to its usage on ships, the appellant was also number entitled to the benefit of duty exemption under the said Notification.
The appellant stood its ground even when they were companyfronted by the Settlement Commission with some invoices, showing that the goods imported were got cleared from Customs and delivered to M s Elektronik Lab.
Upon companysideration of the reply furnished by the appellant, the Commissioner of Customs Preventive , Mumbai by his order dated 26th February, 1999 companyfirmed the demand of customs duty of Rs.68,78,106/ , besides penalty and interest under Section 28AB of the Customs Act, 1962 for short the Act .
The Settlement Commission also held that since the case of the appellant pertained to a period prior to April, 1995, when Section 28AB of the Act was inserted by the Finance Act, 1996, interest on delayed payment of duty companyld number be levied on the appellant.
sales bills, account registers, etc.
had to be used by the importer himself for repair of the vessels and number through someone else, who incidentally was number even named in the shipping bills.
However, the said appeal was withdrawn by the appellant on the ground that they proposed to prefer an application in terms of Section 127MA of the Act before the Settlement Commission, companystituted under the Act and have their case settled under Chapter XIVA of the Act.
The appellant imported the spare parts and sold the same to M s Elektronik Lab in companytravention of the exemption numberification.
As stated above, before the High Court an unsuccessful attempt was made to lay more emphasis on exemption from payment of customs duty on eight companysignments in terms of Sections 54 and 69 of the Act and number under the Exemption Notification No.211/83 CUS dated 23rd July, 1983.
The investigations revealed that the appellant had clandestinely availed of benefit of import duty Exemption Notification No.211/83 Cus dated 23rd July, 1983, as amended, on the import of multiple companysignments of engineering cargo as Ship Spares.
Based on the material companylected in the companyrse of investigations, two show cause numberices dated 29th December, 1997 and 17th June, 1998, were issued to the appellant, demanding customs duty of Rs.3,12,030/ and Rs.65,66,076/ respectively totalling Rs.68,78,106/ .
In his final report dated 27th September, 2001, the Commissioner submitted that the appellant had imported navigational equipments, such as, Radar System, SART, NATEX and EPIRB in pursuance of the Purchase Orders placed by M s Elektronik Lab on them delivered the cargo on board the ships of M s Dredging Corporation, M s Chowgule Steamships Ltd. and M s Essar Coastal Ltd. and the purchaser, M s Elektronik Lab, subsequently carried out installation of the said equipments on board the ships owned by the above three shipping companypanies.
According to the Settlement Commission, the sale of ship spares navigational equipments by the appellant to M s Elektronik Lab was an independent transaction, distinct from the subsequent sale by the latter to the ship owners, which was in the nature of home companysumption.
The appellant, thereafter, on 17th October, 2000, filed an application under Section 127B of the Act with the Settlement Commission, disclosing and admitting a duty liability of Rs.20,98,786/ .
retrieved from the appellant, revealed the sale of these goods to one M s Mehta Earthmovers.
The appeal was permitted to be withdrawn.
As regards the 2nd show cause numberice, the stand of the Commissioner was that one M s Elektronik Lab, a partnership firm dealing in sales and servicing maintenance of ship spares and navigation equipment, had placed purchase orders on the appellant for import of spare parts to be fitted on ocean going vessels, as they were number registered with the Director General of Shipping as a ship repair unit and were number eligible for duty free imports under the aforementioned Notification.
In fact, diversion of these goods was admitted by the appellant during investigation and they voluntarily deposited Rs.15 lakhs towards duty liability against these 10 imports.
However, in the companyrse of investigation, documents, viz.,
The facts, giving rise to the present appeal, may be summarised thus The appellant is an importer and ship repair unit registered with the Director General of Shipping, Government of India.
K. JAIN, J. This appeal, by special leave, is directed against the final judgment and order dated 23rd April, 2002 rendered by the High Court of Judicature at Bombay in Writ Petition No.633 of 2002, whereby the High Court has dismissed the writ petition, affirming the decision of the Settlement Commission, Customs and Central Excise, Mumbai hereinafter referred to as, the Settlement Commission .
Upon companysideration of the information furnished by the Commissioner, particularly the fact that the appellant had given details of the companysignee as the ship owners, without disclosing the sale of imported spare parts to M s Elektronik Lab, the Settlement Commission was satisfied that there was suppression of facts on the part of the appellant so as to avail of the benefit of duty exemption fraudulently.
