COMMISSIONER OF CUSTOMS Vs. H. KUMAR GEMS INC.

JUDGEMENT

(1.) All these three appeals under Section 130 of the Customs Act, 1962 (the Act) arise out of common order dated 1st September, 2008 made by the Customs, Excise & Service Tax Appellate Tribunal [2009 (243) E.L.T. 248 (Tri.-Ahmd.)]. Hence, the same were heard together and are disposed of by this common judgment. Appellant-Revenue has challenged the order dated 1st September, 2008 made by the Customs, Excise & Service Tax Appellate Tribunal (the Tribunal), proposing the following five questions stated to be substantial questions of law:

(2.) The respondent in Tax Appeal No. 467 of 2009 i.e. M/s. H. Kumar Gems Inc. was, inter alia, engaged in the business of gems. The said respondent imported twelve consignments of gold bars and three consignments of silver during the period 24-5-1996 to 20-6-1997 by availing of the benefit of concessional rate of duty in terms of Notification dated 27th April, 1994 bearing No. 117/94-Cus. The said notification exempted gold and silver imported to India on production of Special Import Licence issued in terms of Export & Import Policy, April, 1992 to March, 1997. At the time of import, the benefit of the said notification was extended to the said respondent on production of the twenty-two special import licences and assessments were finalized accordingly. Subsequent investigations by the customs authorities revealed that fifteen out of the twenty-two special import licences submitted by the respondent were defaced and cancelled by the DGFT authorities on the request of the actual owners of the respective licences. Though the DGFT authorities did not find seven of the said special import licences to be defaced or cancelled, it was found that the last transferee of the said licences had not signed the transfer letter. Accordingly, proceedings were initiated against the respondent proposing to deny the benefit of the special import licences and consequently, the benefit of the notification in question. The said proceedings culminated into an order dated 28th November, 2003 made by Commissioner (Customs), whereby the goods imported under various Bills of Entry were ordered to be confiscated. Customs duty amounting to Rs. 4,34,99,534/- was ordered to be recovered from M/s. H. Kumar Gems Inc. under Section 28 of the Customs Act, 1962 along with interest on delayed payment under Section 28AB of the said Act. An equal amount of penalty was imposed on M/s. H. Kumar Gems Inc. Penalty was also imposed on seven other persons, including Shri Shrenik Mehta, respondent in Tax Appeal No. 468 of 2009, under Section 112(b) of the Customs Act, 1962 and penalty of Rs. 1,00,000/- was also imposed upon Mrs. Vidya Mahadik, respondent in Tax Appeal No. 313 of 2009.

(3.) The respondents carried the matter in appeal before the Tribunal. Initially, there was a difference of opinion between two Members of the Tribunal and the matter came to be referred to the Third Member. As per the majority decision, the order passed by Commissioner was set aside and the appeals were allowed with consequential relief.