TMI Blog2003 (5) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... er person used in Section 127B of the Customs Act, 1962? (ii) Is it necessary for each such person to fulfil requirement of provisions of Section 127B ibid or is it sufficient that only one of the applicants fulfils the conditions? (iii) Clause (a) of the first proviso to sub-section (1) of Section 127B envisages that the applicant should have filed a B/E and in respect of which a SCN should have been issued to him by the proper officer. In the light of the fact that under sub-section (1) of Section 46 of the Customs Act, only an importer , which term itself is defined under sub-section (26) of Section 2, can file a B/E. if, any other person referred to in Section 127B(1), had already been deemed, by implication, as an importer under Section 46(1) by virtue of his having filed a bill of entry, how can he be considered as any other person for purposes of Section 127B(1)? (iv) Can the requirement of the filing of a bill of entry by the applicant, as laid down under the aforesaid clause (a) of the first proviso to section 127B(1), be overlooked and ignored in the case of any other person eligible to apply, substituting the word and appearing between the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Bench, Chennai took up the application for hearing on 21-10-2002. Shri B. Kumar, Senior Advocate, who appeared for the trader apart from narrating the facts of the case, stated that his client has admitted the violations and has come forward to pay the duty amount as aforesaid. The Senior Advocate stated that his client has filed the application as any other person and not as importer , inasmuch as, as per sub-section (1) of Section 127B apart from importer , any other person can also make an application for settlement. (It is to be mentioned here that in this order the Special Bench has analysed the provisions with reference to importer and imported goods and not with reference to the exporter or export goods inasmuch as a decision relating to the importer and imported goods will equally apply to the other category, in respect of the issues raised before the Special Bench.) Accordingly, the Senior Advocate submitted that the question of filing bill of entry by the trader - a condition prescribed under clause (a) under first proviso to Section 127B(1) of the Act did not arise in respect of the trader. 3. The representative of the Revenue drew the attention of the Bench to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is oral submissions. The advocates have referred to various case laws and have also submitted copies of some of them. 6. The Special Bench has gone through the records and considered the arguments - both written and oral. The Special Bench has considered it not necessary to narrate the submissions of each of the advocates, as a reference will be made to them in this order at the appropriate places. Only Shri A.K. Chatterjee, Advocate, Mumbai has stated in his written submission dt. 11-4-2003, that the trader would not qualify to approach the Settlement Commission as neither he qualifies as an importer, nor he can legally hold himself as an importer in respect of consignments imported and cleared by numerous importers who have filed bills of entry in terms of Section 2(26) of the Act. According to him, he is not a person who is chargeable to import duty within the provisions of the Act. He has further stated that the term any other person has to be read in conjunction with subsequent provisions in Section 127B(1) and since the applicant has no duty liability, he cannot disclose any such liability for the purpose of qualifying as an applicant but, he could come in his capacity as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption, includes any owner or any person holding himself out to be the importer. (emphasis supplied). From this it is clear that any person who holds himself out to be the importer, is an importer, and not necessarily, only the owner of the goods. This is an inclusive definition. In Siv Industries Ltd. v. CCE, Coimbatore - 2001 (129) E.L.T. 48 (Mad.), the Hon ble Madras High Court have referred to the observations of the apex court with regard to the manner in which exhaustive and inclusive definitions are to be understood, as found in the case of P. Kasilingam v. PSG College of Technology - 1995 SUPP (2) SCC 348, wherein the Apex Court have inter alia, stated that the word includes when used, enlarges the meaning of the expression defined so as to comprehend not only such things as they signify according to their natural import but also those things which the clause declares that they shall include. Thus, the word importer has wide meaning. Under sub-section (1) of Section 28, the proper officer is required to serve notice for any duty not levied or short levied or erroneously refunded, or when any interest payable has not been paid, on person chargeable with du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the custodian of the imported goods and an agent referred to in Section 147 will not be liable for penal proceedings or any prosecution. According to him since no declaration/document is filed by such persons in their individual capacity, any question of incomplete disclosure by them in any declaration to be filed will not arise and consequently, a situation for settling cases by them by applying to Settlement Commission will not exist. 8. While his submission in respect of custodian may be true, the same cannot be said in respect of an agent. Because, as per sub-section (3) of Section 147, the agency is deemed to be the importer and as such, is liable to all consequences as an importer will face. All these provisions make it clear that in the scheme of the Act, other than the importer, any other person is also chargeable with duty, is also liable to all actions that can be taken against an importer. Hence, the words any other person appearing in sub-section (1) of Section 127B are neither redundant nor superfluous. The Senior Counsel Shri Kumar is right in placing reliance on the judgment of the Apex Court in Aswini Kumar Ghosh and Another v. Arabinda Bose and anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, importer of the goods can also be charged with duty. Thus, a person to whom notice is served chargeable with duty on the imported goods, can apply to the Settlement Commission as in that case, he is seeking to settle the case within the definition of case found in clause (b) of Section 127A. 10. Before going into the other conditions in sub-section (1) of Section 127B, it would be expedient to examine the other requirements under clause (a) of the first proviso to this sub-section. There are two requirements (viz), that the applicant should have filed a bill of entry and that a SCN has been issued to him in relation to such B/E. During the hearing on 21-4-2003, Sri Kumar, learned Senior Counsel submitted that if the context so required, the word and could be read as or or vice versa. He, however, hastened to further clarify that such a reading would militate against the requirement of issue of SCN, and that without issue of SCN, parameters for settlement of the case cannot be decided. He, therefore, suggested that the word and appearing in clause (a) of the first proviso to Section 127B(1) could be read as and/or implying that an importer has to satisfy the twin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other hand, we feel that this definition binds an importer for the omissions and commissions if any, either on his part or that of the proper officer of customs necessitating action for recovery of non levy, short levy, etc. and other penal consequences in his capacity as the importer of the goods. It, therefore, follows that any other person is one who could not have filed a B/E. This point can be well understood by reverting back to the provisions in Section 28(1). While under the main provision, the proper officer is empowered to serve notice on person chargeable with duty/interest not levied, short levied and so on, within a period of one year or six months depending on who made the imports, under the proviso ibid, such a notice can be served within 5 years if the short levy, non levy etc. has arisen on account of collusion, wilful mis-statement, fraud and so on. But such mis-statement, collusion, etc. should have been committed by the importer, his agent or his employee. One can detect a collusion, mis-statement, etc. if initially a statement/declaration is made. In fact all the categories of persons mentioned herein, viz. importer, his agent or employee are those w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In this connection, we find that the Additional Bench at Chennai have held in Re : A. Mahesh Raj - 2001 (131) E.L.T. 707 (Sett. Comm.) that it is not the importer or exporter alone but any other person can also make an application for settlement. 12. At the same time, one cannot give a go by to the requirement of filing of B/E, because, if it is so held, then applications will be filed for settlement in outright smuggling cases. Even though Shri B. Kumar, Senior Advocate, canvassed the argument that there is no bar in entertaining applications even, in such cases, the special bench is not inclined to agree on this point. Apart from the above, for ascertaining whether there is any fresh disclosure in the Settlement application which has not been disclosed before the proper officer - a further requirement in section 127B(1) and also for computing whether the additional duty liability disclosed and accepted exceeds Rs. 2 lakhs as required under clause (b) under first proviso to section 127B(1), there has to be a B/E in respect of the goods. The Principal Bench of the Settlement Commission has held that the original assessment in a B/E is the hallmark for making the comparison vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of continued evasion through similar practices. 13. Accordingly, the special bench considers that the interpretation of the provisions will have to be made keeping in view the objective and the context of the scheme. The Hon ble Supreme Court has held in British Airways PLC v. Union of India - 2002 (139) E.L.T. 6 (S.C.), that while interpreting a statute, the court should try to sustain its and give such meaning to the provisions which advance the object sought to be achieved by the enactment. A court cannot approach the enactment with a view to dig holes or to search for defects of drafting which makes its working impossible. It is a cardinal principle of construction of a statute that efforts should be made in construing the different provisions so that each provision will have its play and in the event of any conflict a harmonious construction should be given. The well known principle of harmonious construction is that effect shall be given to all the provisions and further any provision of the statute should be construed with reference to the other provisions so as to make it workable. A particular provision cannot be picked up and interpreted to defeat another provision ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntertaining one application. We find that the Additional Bench, Chennai has already decided that an application seeking settlement of more than one proceedings can be entertained if the issues are inter-related in Re : Altek (I) Pvt. Ltd. - 2002 (145) E.L.T. 733 (Sett. Comm.). Further, the form prescribed under Rule 3 of the Customs (Settlement of Cases) Rules, 1999 seeks inter alia, information on proceedings to which the application for settlement relates, the date from which the proceedings are pending and authority before whom the proceedings are pending . The reference here is to proceedings and not proceeding. In the case of Pali Devi - 1996 (3) SCC 296, the Supreme Court have held that form prescribed under the statute can be looked into and pressed into service for interpreting the statute. This would, therefore, imply that one consolidated application can be made in respect of more than one proceedings provided the issues are inter-related. 17. As undertaken during the hearing, Sri Kumar, Senior Advocate has filed a written submission reiterating that the ratio of the judgment of Madras High Court in Commissioner of Customs (Air) v. Customs Central Excise Settlement C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible to apply, substituting the word and appearing between the requirements of filing bill of entry and issue of SCN in the aforesaid clause, as or to make the two requirements as alternative eligibility conditions ? Answer : As it has been held that any other person could not have filed a B/E or was not required to file a B/E, non filing of B/E specifically by law will not stand in entertaining the application provided that otherwise a B/E has been filed in the case. The word, and appearing between the requirements of filing of B/E and issue of SCN in clause (a) under the first proviso to section 127B(1) cannot be substituted by the word or . (v) Section 127B(1) empowers making of an application at any stage of case . This could by implication call for separate application by the applicant for each case. The term case itself is defined under clause (c) of Section 127A to mean any proceedings under this Act or any other Act . This would also reiterate the requirement of separate application for each proceedings/case. However, the application form SC. (C)-I prescribed under Rule 3 of the Customs (Settlement of Cases) Rules, 1999 seeks, inter alia, informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person , sub-section (1) reads Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, at any stage of a case relating to him make an application......containing a full and true disclosure of his duty liability which has not been disclosed before the proper officer.....the additional amount of duty accepted to be payable by him.... Clause (a) of the first proviso under the above said sub-section specifies that no application shall be made unless the applicant has filed a B/E in respect of import of goods.....and in relation to such B/E a show cause notice has been issued to him by the proper officer . 23. Thus, the person empowered to apply, i.e. applicant, is an importer ...or any other person . The application can be filed at any stage of a case relating to the applicant. It should contain a full and true disclosure of applicant s duty liability, which liability had not been disclosed earlier before the proper officer. The application should also contain the additional amount of duty accepted to be payable by the applicant. By virtue of clause (a) of the first proviso, the applicant should have filed a B/E, and in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part or word of the statute should be considered surplus or superfluous and be omitted to be given effect. The second principle is reiterated by the Hon ble. Apex Court also in the cases of Ashwini Kumar Ghosh and Another v. Arabinda Bose and Anr., and J.K. Cotton Spinning Mills v. State of UP and Others, referred to by the above order. Accordingly, the definition of importer under Section 2(26) should certainly be read into section 127B(1) also. But the said definition being period specific, it would apply only for the period specified therein and not in perpetuity. According to the said sub-section, the meaning ascribed therein to the term importer , would hold good only during the period between their importation and clearance for home consumption. This view has been adopted by Hon ble CEGAT also in the case of Shalin M. Vora v. CC, Mumbai [1999 (112) E.L.T. 857]. While deciding on the stay application of the appellant, the Tribunal observed that The inclusive definition of import in clause (26) of Section 2 applies to goods after goods have been imported and before they are cleared and would not prima facie apply to the persons who cause them to be brought them into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder has rightly refused to read the conjunctive word and appearing between B/E and SCN, as or , which would enable even now any one who has only filed B/E or received SCN to come as an applicant before the Commission, defeating the very object of the amendment of 2000. 30. However, the view that since any body who filed a B/E would be an importer as Section 46 empowers only an importer to file a B/E, and, therefore, if any other person also had filed a B/E, he would also be an importer in his own right, rendering the reference under section 127B(1) to any other person redundant, appears to suffer from a misconception that the definition of the term importer under Section 2(26) has to be read into section 127B in perpetuity. Strictly, as mentioned earlier, the term importer in Section 127B(1) can be ascribed the definition under Section 2(26), only if an application for settlement is made when the imported goods are still under customs custody and not yet cleared for home consumption. Only, in such eventuality, the apprehensions of the above order would be valid. On the other hand, in cases where the goods stand cleared for home consumption before the applicant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself is defined u/s 127A(b) as, a proceeding involving levy, assessment and collection of duty and hence, only if he himself had filed a B/E he would become eligible to apply with a case relating to him.. Accordingly, there is no need to deem that his (applicant s) disclosure was nil, unless otherwise he had filed a B/E and so disclosed any liability in his B/E in view of either statutory nil rate of duty on the said goods or a claim for total exemption from duty. Even legally, it is felt non-filing of a B/E would not tantamount to a disclosure of a nil , duty liability, but would only amount to a simple non disclosure. 32. Further, the duty liability of the applicant to be disclosed in the application is the applicant s own duty liability, which has not been disclosed before the proper officer . Naturally, the duty liability disclosed in a B/E would be the liability of the person filing the B/E. Even in terms of Section 47(1), the proper officer can permit clearance of the goods subject to, amongst other conditions, the importer having paid the duty. Therefore, the duty liability reflected on a B/E is the liability cast on the importer as defined under Section 2(26) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, he was entitled to file a B/E for clearance of the goods under Section 46. If he had also filed a B/E, certainly he could have had an assessment dispute and hence a case as defined section 127A(b) in relation to which he may opt to approach the commission. 35. The above order has found force in the contention of the senior Counsel, Shri B. Kumar that in the prescribed format of the application for settlement i.e. SC(C)-1, col. 6 makes a generic reference only while seeking details of Bs/E filed in relation to the case. However, it would be appropriate to interpret the prescribed application form with reference to the main provision and not vice versa, unless otherwise there is unreconcilable ambiguity in the said provision. Therefore, the details required in the form should also be taken as details of the Bs/E filed by the applicant. 36. Reference is also drawn in the above order to an earlier order of this Bench in Re : A. Mahesh Raj which had held that it is not only the importer or exporter alone but any other person who can make an application. But the context in which the said observation was made and the facts of the said case are distinguishable. In the said case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosure in the application. But they were not admitted under the status of any other person referred to in Section 127B(1), but only as co-applicants. The Principal Bench of the Commission has held in the case of Oriflame India Pvt. Limited [2000 (122) E.L.T. 601] that It is, therefore, clear from the scheme of the Act that the Commission is duty bound to consider the SCN in its entirety and as such all the co-noticees in the SCN are entitled to be applicants before the Commission. The requirement under proviso (a) of Section 32E(1) will have to be interpreted in a manner which is consistent with the scheme of the Act. Adopting the ratio of this decision, all the Benches have been admitting the applications of co-noticees also, in spite of the fact that they had not filed B/E and did not have a case pending and also did not admit additional duty disclosure, if, and only if, the main noticee who had filed B/E and satisfied all other conditions of Section 127B had also filed an application in the said case. 39. As regards the filing of a consolidated application, I agree with the conclusion in the above order that one consolidated application can be made in respect of more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erting back to the earlier situation through interpretation by the Commission. Query 5 - Answer : A consolidated application can be made by an applicant in respect of more than one proceedings provided the issues in the proceedings are inter-related. However, in the case of a co-noticee coming before the Bench in the trail of an application by main noticee, he can file a consolidated application in more than one inter-related proceeding only if the main noticee in all such proceedings is common and has also filed an application as an applicant in respect of all such proceedings. (Sd./-) (K.P. Sridhara Raman) Member 41. [Order per : N. Raja, Member]. - I have the privilege to go through separate detailed orders of the Learned Vice-Chairman as well as Member, Additional Bench of the Commission. 42. The Learned Member has come to the conclusion that the definition of the term Importer u/s 2(26) of the Customs Act, 1962 (hereinafter referred to as the Act) can be read into sub-section (1) of Section 127B of the Act, only so long as the goods after import have not been cleared for home consumption and not thereafter. Therefore, if an application is sought to be file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een facing the Special Bench is how to reconcile the substantive provisions of sub-section (1) of Sec. 127B of the Act which permits any other person who has not filed any Bill of Entry but has a duty liability to approach the Commission with clause (a) of the proviso to the above section which stipulates that the applicant should have filed a Bill of Entry. During the course of arguments before the Special Bench by one of the Advocates, Shri V. Sridharan, he pointed out that the word applicant used in the substantive provision of Sec. 127B(1) was used as a definition for the expressions any importer, exporter or any other person and hence the said expressions in their entirety should be read into the word applicant in clause (a) of the proviso of Section 127B(1). In that case, the proviso would convey the meaning that any importer, exporter or any other person should have filed a Bill of Entry. This would mean that it is sufficient if a Bill of Entry had been filed in the case but not necessarily by the very person approaching the Commission. In my opinion, the above reasoning supplements the other reasons given in the order of the Learned Vice-Chairman in the harmonious c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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