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M/s CS India And Others Versus Additional Director General Directorate of Central Excise Intelligence And Others

2015 (11) TMI 142 - KARNATAKA HIGH COURT

Settlement of case - before submitting reply to the show cause notice, approached the Settlement Commission - Application to Section 127B of Customs Act - Maintainability of appeal - Held that:- Bills of Entry appended to the show cause notice issued to the petitioners would indicate that these are notified goods under Section 123 of the Act. It is because of this precise reason, Settlement Commission having taken note of the fact that goods in question would fall within the definition of goods .....

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long as the ingredients of Section 123 are attracted and application of the petitioner would squarely fall within 3rd proviso of Section 127B of the Act.

Petitioners are yet to reply to the show cause notice. The dismissal of the application filed before the Settlement Commission as affirmed by the learned Single Judge which has been confirmed by us, would not prevent the writ petitioners to file reply to the said show cause notice and during the course of the adjudication proceeding .....

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Uday Holla, Sr.Counsel a/w Sri Brijesh Patel, Adv For the Respondent : Sri Jeevan J Neeralgi, Standing Adv. JUDGMENT In this intra-court appeal, writ petitioners are calling in question the correctness and legality of the order dated 13.4.2004 passed in WP No.5463/2004 where under the writ petition filed by petitioners calling in question the order passed by the Settlement Commission on 21.8.2003 - Annexure E as well as order dated 19.9.2003 - Annexure J came to be dismissed by confirming the o .....

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se notice, approached the Settlement Commission by filing an application under Section 127B of the Customs Act, 1962 (for short Act ) for adjudicating the said application. The Settlement Commission held that application is not maintainable in view of the third proviso to Section 123 of the Act and as such, dismissed the application as not maintainable. Aggrieved by this order, petitioners sought for review of the same by filing a miscellaneous application. On 19.9.2003, the Settlement Commissio .....

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passed by the Settlement Commission and thereby rejected the writ petition reserving liberty to petitioners to file reply to t he show cause notice and get the matter adjudicated. Hence , the present appeal. 3. We have heard the learned advocates appearing for the parties namely Sri Udaya Holla, learned Senior counsel for the petitioners and Sri Jeevan J Neeralgi, learned panel counsel for the Revenue. Perused the case papers 4. It is the contention of Sri Udaya Holla, learn ed Senior Counsel a .....

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in accordance with law. In support of his submission, learned counsel has relied upon the following cases: • Union of India & Ors Vs Mohd. Ramzan Khan - (1991) 1 SCC 588 • Sona Builders Vs Union of India & Ors - (2001) 10 SCC 280 • State of Assan & Anr Vs Mahendra Kumar Das & Ors - 1970(1) SCC 709 • R Shamanna Vs State Bank of Mysore, Bangalore - ILR 2003 KAR 4467 • N Krishnan (Dead, by LRs) Vs Settlement Commission & Ors - 1989 (180) ITR 585 • H .....

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d be outside the purview of adjudication by Settlement Commission and as such, it came to be rightly held by the Settlement Commission that application filed by petitioner for settlement was not maintainable for being entertained on merits and as such, he seeks for affirming the order passed by th e learned Single Judge as well as the Settlement Commission. He would also contend that Miscellaneous Application came to be filed by the petitioner to recall the order dated 21.08.2013 passed by the S .....

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Act is in consonance with material evidence available on record and as such, learned Single Judge has rightly dismissed the writ petition. On these grounds, he prays for dismissal of the writ appeal In support of his submission he has relied upon the following judgments: • Commissioner of Customs, Bangalore vs. A. Mahesh Raj- 2006 (195) E.L.T. 261 (Kar. • Yashavi Enterprises vs. Cus. & C.EX. Settlement Commission, Chennai-2015 (315) E.L.T. 490 (Mad.) • Platinum Exports vs. Uni .....

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amy Suppiah Venugopal vs. Union of India-2009 (235) E.L.T. 595 (Bom.) • Commissioner of Income Tax, Jalpaiguri vs. Om Prakash Mittal-2005 (184) E.L.T. 3 (S.C) 6. Having heard the learned advocates appearing for the parties and on perusal of entire case paper s, we have bestowed our careful consideration to the rival contentions raised at the bar. We are of the considered view that orders passed by the Settlement Commission as well as learned Single Judge do not call for interference for the .....

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he intelligence gathered by DGCEI that the applicant has diverted the fabric and other goods imported duty free for purposes other than manufacture of ready made garments for exports, simultaneous search operations was conducted on 23.05.2002 in different premises including the premises of the companies belonging to the same group to which petitioner belongs. Seizure of the fabrics was mad e and further investigation was taken up. The DGCEI came to a conclusion that writ petitioner had clandesti .....

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ion under Section 127B of the Act before the Settlement Commission. (c) The Settlement Commission after considering the submissions from both the sides has held that 3rd proviso to sub-section (1) of Section 127B of the Act is attracted since major portion of the duty demanded relates to Polyester Satin Fabrics , Polyester Taffeta Fabrics , 100% Nylon Fabrics and Polyclass which are goods notified under Section 123 of the Act, since these goods finds a place in the notification No.204-CUS dated .....

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review its order 7. A bare reading of the statutory provision name ly Section 127B of the Customs Act, 1962 would clearly indicate that an application under Section 127B bef ore Settlement Commission would not be maintainable or in other words, such application cannot be filed by an applicant before the Settlement Commission if it relates to goods to which Section 123 applies or to goods in relation to which any offence under the Narcotic Drugs & Psychotropic Substances Act, 1985 has been co .....

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ioner on such importation was required to export the goods and as such, mandatorily required to store the said goods in a bonded ware house . The records would also disclose that when the Proper Officer seized the said goods, it was not in the bonded ware house but outside such bonded ware house 8. Be that as it may, the moot question which arises in this case is whether 3rd proviso to Section 127B of the Act is attracted or not? Goods in question, according to the petitioners, would comprise of .....

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as not able to demonstrate that the entire goods covered by the show cause notice, apart from the seized goods, consisted predominantly of cotton fabrics which was not covered by Section 123 of the Act. The Settlement Commission, on facts, has observed that most of the goods covered in the show cause notice are the ones to which Section 123 applies. As to whether the said goods are cotton or nylon fabrics is a disputed question of fact and as such, this aspect cannot be gone into by the Settleme .....

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play and as such, held that application is not maintainable. In that view of the matter, we are of the considered view that the application filed by the writ petitioners seeking f or settlement of dispute before the Settlement Commission by invoking Section 127B of the Act, was not required to be entertained by the Settlement Commission and as long as the ingredients of Section 123 are attracted and application of the petitioner would squarely fall within 3rd proviso of Section 127B of the Act 9 .....

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se said power inasmuch as, we do not find any error in the orders of the Settlement Commission an d learned Single Judge for the simple reason that Settlement Commission, by impugned order dated 21.8.2003, has noticed that the goods in question a s indicated in the show cause notice, are goods notified under Section 123 of the Customs Act as per the notification No.204-CUS dated 20.7.1984. It is no doubt true that this Court, being the appellate Court and appeal proceedings being continuation of .....

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application filed by the petitioner before Settlement Commission ought to have been accepted by it would be erroneous, inasmuch as, even in cases of clandestine importation, there will be no Bill of Entry and eve n in such circumstances, an application for settlement cannot be filed since filing of Bill of Entry is a condition precedent to entertain an application before Settlement Commission as indicated in clause (a) of first proviso to sub-section (1) of Section 127B of the Act. Hence, even i .....

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