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Judgment
This is an application under Order XLVII for review of order dated 22nd July, 2014 by which the applicant-appellant was directed to deposit Rs. 25 crores within a period of three weeks. Customs, Excise and Service Tax Appellate Tribunal, by the impugned order dated 11th February, 2014, had directed the applicant to deposit Rs. 30 crores against duty demand of Rs. 23,84,30,219/- and penalty of Rs. 8 crores, plus interest. We had refrained and had not passed a detailed order on 22nd July, 2014, as notice has been issued and the main contention raised was that waiver of the penalty amount should have been granted. While passing the said order for deposit of Rs. 25 crores, we had taken into consideration, the principal duty demand of Rs. 23.84 crores and the interest, which would have accrued thereon. Interest @ 15% per annum, works to Rs. 3.5 crores per year on Rs. 23.84 cores. Deposit of Rs. 25 crores, in terms of order dated 22nd July, 2014, has not been made and as per the office report, even process fee has not been filed, though this is contested by the counsel for the applicant. Now, this application for review/recall has been filed.
The applicant-company a joint venture of Alpha Airport Group, PLC, a UK based company and Pantaloon Retail India Limited, was incorporated for operating duty free shops at the Indira Gandhi International Airport. The applicant had obtained private bonded warehouse licence from Assistant Commissioner (Customs Bond), New Customs House, New Delhi under Section 58 of the Customs Act. The licence No. 53/2007, dated 14th February, 2007, was granted for a period of three years upto 31st March, 2010. The allegation against the applicant was that they had sold substantial quantity of imported liquors, etc. to domestic passengers, or otherwise in violation of the provisions of the Customs Bonded Warehouse Licence and provisions of the Customs Act.
The impugned order, passed by the Tribunal, is very detailed and lucidly set out the factual findings, which has resulted in the impugned demand. Customs department got alarmed upon recovery of 51 duty free liquor bottles sold to a domestic passenger. This was detected on 8-10-2008. On detailed verification, it was affirmed that a passport number, which had not been issued to any person, was repeatedly used in the bills for sales in the name of different passengers. Fraudulent passport numbers were used or same passport number was used for different passengers. There was fabrication of records. Reference was specifically made to the sample study and examination of bills during the period 1-10-2008 to 8-10-2008 and bill Nos. 94 to 592. The defaults and deficiencies noticed in the said billing stands recorded in paragraph 19.4 of the original adjudication order. The adjudication order refers to alleged sales in the name of one Manish, an Indian national, holder of passport No. A1425369. Upon verification, it was noticed that 47 sale bills had been issued in the name of Manish mentioning departure by different flights and these details have been mentioned in paragraphs 20 to 23 of the adjudication order. This passport number was also used against other names like Pradeep, Jatin, Kawaljit, Tarun, etc. These details find mention in paragraphs 30 to 31 of the impugned order passed by the Tribunal. Paragraph 33 of the impugned order records that on investigation, it was found that there was falsification of record regarding receipt of sale proceeds in US Dollars from undisclosed source and such currency was deposited in an account of M/s. Thomas Cook.
As a result of investigation, the quantum sales made in violation of bonded warehouse licence etc. was quantified and computed as Rs. 14.98 crores. This involved duty evasion of Rs. 23.84 crores.
In view of the aforesaid position, in our order dated 22nd July, 2014, we had directed a payment of Rs. 25 crores. We notice that the contention raised by the applicant is that the principal now based in Spain do not have sufficient funds in India. This may well be a good reason why the pre-deposit is required and mandated in the present case. Another contention raised is that the employees of the applicant have indulged in malpractices. We would not like to comment in detail on the said contention, but only record that the quantum of transactions in the present case found to be dubious or fraudulent, is to the tune of Rs. 14.98 crores, which is not a small figure and is reflective of the rampant and repeated misuse and violations. This prima facie does appear to be a work of one or some deviant employees, who may have gained personal benefit/advantage. In any case these are aspects, to be finally examined and considered. For the present, these arguments do not impress us.
In these circumstances, we are not inclined to allow the present review application and the same is dismissed.
Cus. A.C. No. 2/2014
Respondent has not been served. We had issued notice subject to the appellant depositing Rs. 25 crores within three weeks. Learned counsel for the appellant states that they are not in a position to deposit Rs. 25 crores due to lack of funds. In the present case, upon detailed investigation, it has been noticed that sales of Rs. 14.83 crores, contrary to law was made from the duty free shops being operated by the appellant at the Indira Gandhi International Airport. The factual aspects have been duly noticed in the impugned order passed by the Tribunal, which is elaborate, lucid and detailed on the said aspects. We have already noted the factual position in depth and detail while dismissing the review application for modification/recall of order dated 22nd July, 2014. The total quantum of customs duty evaded is about Rs. 23.84 crores. Interest was/is payable. Penalty of Rs. 8 crores has been imposed. In these circumstances, we do not think any purpose will be served by issuing fresh notice to the respondent. The appeal is dismissed.