TMI Blog2013 (8) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... t:- The application filed was maintainable it was not open to the revenue to contend that the Settlement Commission was in error in entertaining the application – the Commission noticed that baggage is a specific item under Chapter heading 98.03 of the Customs Tariff Act, 1985 - It rested its conclusion on the fact that the duty computed by the Revenue in the show cause notice itself was 35% ad valorem which related to baggage - Idris Y. Porbunderwala [2005 (6) TMI 302 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,]. On a careful reading of Sections 127(A) and 127(B) the Revenue’s contention that since the applicant had not filed bill of entry or that the case was one relating to baggage and therefore did not involve short levy or non-levy was without force - The provisions that confer jurisdiction on the Settlement Commission cannot be construed as narrowly as it sought to be urged by the Revenue - If parliamentary intention was to exclude adjudication by Customs Authorities in respect of baggage claim, from the purview of the Commission’s jurisdiction, surely such intention would have been more clearly manifested like in the case of 3 proviso of Section 127(B)(i) – petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. After considering the rival submissions, the Commission settled the case under Section 127(C)(5) by directing payment of Customs duty of Rs. 16,16,728/- with specified amount of interest. Its order further directed confiscation of the watches and allowed redemption on payment of Rs. 2,50,000/. Furthermore, the Commission imposed penalty of Rs. 2,00,000/- on the applicant. The applicant had deposited Rs. 22,50,000/- before the Addl. Chief Metropolitan Magistrate, New Delhi, in the meanwhile. The amounts directed to be paid by him were ordered to be appropriated by the said deposited amount. 2. The Revenue contended that the Commission failed to appreciate that the applicant s case was not one under Section 127(A) as he did not file any bill of entry or shipping bill under Section 127(C). It was also not a case of short levy on account of mis-declaration or undervaluation or inapplicability of exemption notification. In these circumstances, the Commission lacked jurisdiction to even entertain or proceed further with the matter. It was contended by the Counsel that the applicant s case squarely fell within the head of baggage where he had given a declaration under Section 77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order itself revealed detailed consideration of facts under Section 77. The Commission had examined the decision and noticed that passengers had to give proof of check in, hand baggage and the total value of dutiable goods. In such circumstances, the items loose their specific value under the tariff and are charged to duty under chapter heading 98.03 of the Customs Tariff Act, 1985. The Commission had further noticed that even the Revenue had computed the duty and 35% ad valorem relating to baggage. In these circumstances the Commission held that Section 123 was inapplicable. 5. This Court has considered the submissions of the parties. The relevant provisions of the Customs Act are as under : SECTION 28. Recovery of duties not levied or short-levied or erroneously refunded. - (1) Where any duty has not been levied or has been short-levied or erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any willful misstatement or suppression of facts,- (a) the proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person concerned be oral. SECTION 127A. Definitions. - In this Chapter, unless the context otherwise requires, (a) Bench means a Bench of the Settlement Commission; (b) case means any proceeding under this Act or any other Act for the levy, assessment and collection of customs duty, pending before an adjudicating authority on the date on which an application under sub-section (1) of Section 127B is made : Provided that when any proceeding is referred back in any appeal or revision, as the case may be, by any court, Appellate Tribunal or any other authority, to the adjudicating authority for afresh adjudication or decision, as the case may be, then such proceeding shall not be deemed to be a proceeding pending within the meaning of this clause; SECTION 127B. Application for settlement of cases. - (1) Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, in respect of a case, relating to him make an application, before adjudication to the Settlement Commission to have the case settled, in such form and in such manner as may be specified by rules, and containing a full and true disclosure of his duty liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the seizure. (3) Every application made under sub-section (1) shall be accompanied by such fees as may be specified by rules. (4) An application made under sub-section (1) shall not be allowed to be withdrawn by the applicant. SECTION 127J. Order of settlement to be conclusive. - Every order of settlement passed under sub-section (5) of Section 127C shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force. 6. The Revenue s contention was that proceedings in relation to baggage brought in by the passengers after declaration under Section 77 do not fall within the description case , was rejected by the Commission. The impugned order held that the applicant was asked to show cause why amounts towards the duty and interest under Section 28(A)(1) could not be determined and demanded; also was asked to explain why the value of one of the watches should not be re-determined. Thus a plain reading of the show cause notice revealed that it had invoked both the demands - additional duty an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also taken a similar view with which we are in complete agreement. 7. The Commission rejected the arguments on the ground that the case to be covered under Section 127(A) to clothe it with the jurisdiction to regulate import where a bill of entry is filed under Section 46 alone would be applicable. It was noticed that the applicant arrived as a passenger and brought some goods with him. He was required to fill in disembarkation card which he did and in it he declared value of the goods imported as baggage . On account of Section 77 and Chapter under which it fell, he was not expected to file bill of entry. In this background the Commission held : . He was not required to file a bill of entry for the goods imported by him as baggage. If it was so required, the proper officer, i.e. the officer, who was required to allow clearance of baggage, could have asked him to file a bill of entry. Since there was no such requirement, and since the applicant was required only to fill in a DC, no fault can be found with him on this score. Importation of goods as baggage is only one of the modes of importation and as such if a bill of entry is allowed to be filed in baggage cases, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 as in the present case. This observation of the Court is strengthened by the fact that Section 127(B) itself enumerates the kinds of cases which cannot be entertained by the Commission, for instance listed in third proviso of Section 127(B)(i). Having regard to these and the observations of the Madras High Court in Commissioner of Customs v. Customs Excise Settlement Commission, 2008 (222) E.L.T. 344 and that of Manish Kalvadiya, this Court is of the opinion that the argument of the Revenue on this aspect lacks in merit. It would be worthwhile in this context to notice the observations of the Bombay High Court which are as follows : 8. Mr. Jetly, learned counsel appearing on behalf of the revenue in Writ Petition No. 9171 of 2005 submitted twofold arguments. Firstly, he submitted that in the absence of filing of bill of entry as contemplated under the proviso to Section 127C(1) of the Customs Act, the Settlement Commission has no jurisdiction to entertain the application filed by Manish Kalvadiya. Secondly, he submitted that when M/s. I.P. Patel Co. had filed a separate application in respect of 34147.66 carats of cut and polished diamond, the Commission could have held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticee in respect of 34147.66 carats of cut and polished diamond. 10. In rejecting the further submissions of Section 77, the Commission noticed that baggage is a specific item under Chapter heading 98.03 of the Customs Tariff Act, 1985. It rested its conclusion on the fact that the duty computed by the Revenue in the show cause notice itself was 35% ad valorem which related to baggage. The Commission relied upon its Special Bench order in Idris Y. Porbunderwala, 2005 (186) E.L.T. 356. 11. For the foregoing reasons, this Court is of the opinion that on a careful reading of Sections 127(A) and 127(B) the Revenue s contention that since the applicant had not filed bill of entry or that the case was one relating to baggage and therefore did not involve short levy or non-levy is without force. The provisions that confer jurisdiction on the Settlement Commission cannot, in the opinion of the Court, be construed as narrowly as it sought to be urged by the Revenue. If parliamentary intention is to exclude adjudication by Customs Authorities in respect of baggage claim, from the purview of the Commission s jurisdiction, surely such intention would have been more clearly manifested li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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