Case Law Details
Flemingo DFS Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held that non-renewal of Private Bonded Warehouse license alleging settlement of disputes and admission of duty liability before Settlement Commission is unjustified. As post settlement, immunity is granted to the assessee from fine, penalty and prosecution under Customs Act and any other Central Act.
Facts- The appellant, M/s. Flemingo DFS Pvt. Ltd, which runs a chain of Duty-Free Shops, was issued a Private Bonded Warehouse license. The said warehouse is situated within the premises of Chennai Sea Port. The license was periodically renewed by the appellant. They were also permitted to operate Duty-Free Shop adjacent to the licensed Private Bonded warehouse which was also inside the Sea Port premises. This duty free shop was engaged in the sale of goods like liquor and cigarettes. The appellant had requested for renewal of license.
Notably, in the year 2006, the appellant had been involved in clandestine removal of goods by forging documents, making false declarations and causing loss of revenue to the tune of 3.88 crores for which Show Cause Notice dated 10.01.2007 was issued by department. The appellant then approached the Settlement Commission and settled the matter by payment of duty of Rs. 82,25,502.45 and was granted immunity from prosecutions.
Conclusion- Held that 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.
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