2014 (4) TMI 1182 - HC - Customs

Rejection of Settlement Commission Application - Section 127B of the Customs Act - requirement that the application must be accompanied by a Bill of Entry or Shipping Bill in respect of which a show cause notice has been issued to the applicant - Held that - A facial reading of the proviso (a) to Section 127B informs the Court that the applicant has to necessarily file either the Bill of Entry or the Shipping Bill in respect of the export or import of the goods (which are the subject matter of the application) with regard to which a show cause notice has been issued to him by the appropriate officer. The proviso spelling-out no less than six conditions have to be seen as part of the entire scheme. It is not sufficient for any applicant be he an importer exporter or other person to merely file an application he has to perforce file the Bill of Entry or Shipping Bill in respect of which show cause notice has been issued; likewise the applicant has to deposit the amount accepted by him along with interest proviso (b) and (c) . Furthermore the Settlement Commission has no jurisdiction in respect of cases that are pending in the Tribunal or any Court and applications in relation to goods covered by Section 123 of the Customs Act or in relation to which any offence under the Narcotic Drugs and Psychotropic Substances Act has been committed are not entertainable. Upon an overall analysis of Section 127B this Court is of the opinion that there is no merit in the petitioners contention that the expression and in proviso (a) has to be read disjunctively as or . The entire scheme of the provisos (a) (b) and (c) of Section 127B(1) and further provisos militate against such an interpretation. In these circumstances the Court is satisfied that no interference with the order of the Settlement Commission is called for - petition dismissed - decided against petitioner.

Summary

Issues:
1. Rejection of settlement application under Section 127B of the Customs Act by the Settlement Commission.

Analysis:
The petitioners were aggrieved by the rejection of their settlement application by the Settlement Commission under Section 127B of the Customs Act. The case involved a search conducted by the Department of Revenue Intelligence (DRI) in the petitioners' godowns, resulting in the recovery of goods without proper import documents. The petitioners approached the Settlement Commission with an application under Section 127B, complying with the provision by depositing the required amount. However, the Settlement Commission refused to entertain the application, leading to the petitioners challenging the decision.

The main contention raised by the petitioners was regarding the interpretation of the proviso to Section 127B(A) concerning the submission of a Bill of Entry or Shipping Bill along with the application. The petitioners argued that the Commission's strict interpretation of this requirement was narrow and technical, limiting the right of 'any other person' to apply for settlement. They emphasized that the purpose of the settlement mechanism was to maximize revenue collection and that the Commission's construction was restrictive.

The Settlement Commission rejected the petitioners' arguments based on various grounds. It noted that the petitioners had removed containers without proper documentation, manipulated gate passes, and forged duty payment records. The Commission highlighted that the proviso to Section 127B required the submission of a Bill of Entry, which was not done in this case. Additionally, the petitioners failed to provide full and true disclosure of goods details and payment methods for the imported items. The Commission also considered discrepancies in the information provided regarding the imported goods.

The Court analyzed the provisions of Section 127B in detail, emphasizing the conditions for approaching the Settlement Commission, including the submission of Bill of Entry or Shipping Bill, payment of additional duty exceeding a specified amount, and full disclosure of duty liability. The Court concluded that the petitioners' argument that the requirement of attaching the Bill of Entry or Shipping Bill should be read disjunctively was not valid. It upheld the conditions set out in the section as essential for accessing the settlement mechanism. Therefore, the Court dismissed the petition, finding no grounds to interfere with the Settlement Commission's decision.

In conclusion, the judgment delves into the interpretation of Section 127B of the Customs Act, highlighting the conditions and requirements for making a settlement application. It underscores the importance of fulfilling the prescribed conditions, including the submission of necessary documents and payment of dues, to access the settlement mechanism. The Court's detailed analysis reaffirms the significance of compliance with statutory provisions in seeking settlement under the Customs Act.