RAKESH KUMAR Vs. CC (ICD), TUGHLAKABAD

JUDGEMENT

(1.) THE above application for waiver of pre -deposit of penalties and stay of recovery thereof, arises out of the order of the Commissioner of Customs who has imposed penalties upon the applicant as under: - -

(2.) THE appellant's statement has been corroborated by Shri Ramesh Chawla, who was the handling agent of M/s. MMTC in New Delhi. The contention of the appellant is that there is an order dated 29.6.1999 passed by the Income -tax Settlement Commission in terms of Section 245 -D(4) of the Income -tax Act, holding him to be a manufacturer and not a trader and that this order is binding upon all authorities, according to Section 245 -I of the Income -tax Act. Therefore, it is not open to the Customs Authorities to take a contrary view, particularly when the same set of investigations as in the present case, was before the Income -tax Settlement Commission and which led to the conclusion by that Commission that the appellant was an actual manufacturer. However, we see no substance prima facie in this contention and on the other hand, we see force in the submissions of the learned DR that prima facie the order passed by the Income -tax Settlement Commission under the Income -tax Act, relates only to disclosure of income and income -tax liability and does not extend to proceedings under the Customs Act which is a separate Statute enacted for different purposes namely Indirect Taxation (while the Income -tax Act has been enacted for inter alia for collection of direct taxes). Further, the order of the Income -tax Settlement Commission was not brought to the notice of the Commissioner of Customs.

(3.) THE submission of the Learned Counsel that the provisions of Section 111(o) of the Customs Act, 1962 under which the penalty has been imposed, are not attracted to the facts of the case, is debatable, having regard to the provisions of the April 1988 March 1991 Import Policy and the Import Trade Control Regulation and the Import (Control) Order, 1955. The Policy for allotment of non -ferrous metal to Actual Users (industrial) was stipulated in Chapter 4 of Handbook of Procedures, April 1988 -1991 dealing with canalization of import of various raw materials and for its subsequent allotment to the actual users. The eligible actual users had to register 12 months requirements with the concerned canalizing agency, (in the instant case with M/s. MMTC) together with the earnest money calculated at 2% of the sale value of the quantity so registered or Rs. one lakh whichever was less. The application was to be made in form given in Appendix IV -A of the Handbook. The Import Trade Control Policy defined 'actual user' (industrial) as an industrial undertaking, be it large scale, small scale or cottage, engaged in the manufacture of any goods for which it held a license or registration certificate from the appropriate Government authority, wherever applicable. It was further clarified that actual user means a person who applies for/secures a licence for the import of any item or allotment of an imported item required for his own use and not for business or trade in it.