The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that adjudication against the co-noticee even after the settlement of the dispute by the settlement commission is not valid.
A common show cause notice was issued to the exporter – M/s. AKS Apparels, New Delhi proposing to hold the goods liable to confiscation in respect of 321 shipping bills to the show cause notice, with a further proposal to deny the benefit under the ‘Focus Market Scheme’ to recover the amount already disbursed of Rs.4,13,99,583/-.
The appellant – M/s. Evergreen Shipping Agency India Pvt. Ltd.wasmadea co-noticeealongwiththreeothers viz. i) Shri Imran Mirza, ii) Shri Nitin Gupta and iii) M/s. APL India Pvt. Ltd. The main noticee M/s.AKS Apparels and Shri Nitin Gupta approached the Settlement Commission, New Delhi.
The Settlement Commissionsettled the dispute finally giving immunity from prosecution, etc. The Adjudicating Authority considered that the dispute is settled vide the order of the Settlement Commission only in respect of M/s. AKS Apparels and Shri Nitin Gupta, and is not settled for other co-noticees including this appellant in the show cause notice.
The penalty was imposed on theappellant and two other co-noticeesviz. Mr. Imran Mirza and M/s. APL India Pvt. Ltd.
It was contended that a settlement order ends the dispute not only concerning the applicant before the Commission but also qua-other conoticees. Once an order of settlement is passed by the Settlement Commission, the entire dispute comes to an end and thereafter, the case cannot be adjudicated bythe otherco-noticees.
The very purpose of approaching the Settlement Commission is to bring to an end proceedings initiated by the authorities. While passing the order, the Settlement Commission takes into consideration the offer/ disclosure made by the importer and also the submissions of the department and finally, a decision is taken.
It was viewed that the Settlement Commission found that the importer had made true and full disclosure of all the facts relating to imported goods. The Commission also took into consideration the additional amount of Customs duty and interest paid by the importer. Accordingly, the importer was granted immunity from prosecution, fine and penalty.
It was observed that if the proceedings against the importer have thus come to an end, it will be discriminatory and unfair to continue the proceedings against the CHA about the very same transaction.
A single-member bench comprising Mr Anil Choudhary, (Judicial) held that the appellant is also entitled to immunity granted by the Settlement Commission, to the main noticee. While allowing the appeal, the CESTAT set aside the impugned order.
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