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2016 (5) TMI 299 - GUJARAT HIGH COURT

2016 (5) TMI 299 - GUJARAT HIGH COURT - 2016 (336) E.L.T. 402 (Guj.) - Settlement Commission - Jurisdiction of settlement Commission to entertain the application - 3rd proviso to sub-section (1) of Section 127B - Import of 50 kg of gold bars - Seizure of 25 kg, sent outside SEZ area without documentation and proper authority - Petitioners pending proceedings applied to Settlement Commission but it passed the order holding that it had no jurisdiction to entertain the petitioners application - Pet .....

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ent sections of the same statute or some times even in different statutes. In essence, therefore, 3rd proviso to sub-section (1) of Section 127B incorporates the applicability clause of Section 123 for the ouster of the jurisdiction of the Settlement commission. It has nothing to do with the eventuality of shifting of burden of proof. It is perhaps because of this reason that the Settlement Commission in the Special Bench judgment in case of Idris Y.Porbunderwala (supra) used the expression “inv .....

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ssues. - Applicability of Ratio of decision of different High Courts - Being a central statute bearing tax implications, we would, even otherwise, be slow in taking different view from two reasoned judgments of other High Courts. Even if, therefore, another view was possible, for the sake of consistency, we would have respectfully followed the view of other High Courts. - In the decision of Supreme Court in the case of J.K.Bardolia Mills Vs. M.L.Khunger, Deputy Collector [1994 (7) TMI 90 .....

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goods to which Section 123 applies have been recognized. Therefore, the Settlement Commission has correctly applied 3rd proviso to sub-section (1) of Section 127B of the Act. - Decided against the petitioner - SPECIAL CIVIL APPLICATION NO. 3144 of 2016, SPECIAL CIVIL APPLICATION NO. 3146 of 2016 - Dated:- 27-4-2016 - MR.JUSTICE AKIL KURESHI AND MR.JUSTICE A.Y. KOGJE, JJ. FOR THE PETITIONER : MR PARESH M DAVE, ADVOCATE, MR HRIDAY BUCH, ADVOCATE FOR THE RESPONDENT : NOTICE SERVED ORAL JUDGMENT (PE .....

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de SEZ area on 12.06.2014 without documentation and proper authority, when the vehicle carrying the goods was intercepted by the DIR authorities and the goods were seized. A show cause notice was issued to the petitioner on 02.12.2014 by the Additional Director General of Revenue Intelligence calling upon the petitioner why seized gold valued at ₹ 6.75 crores not be confiscated absolutely and penalty under Section 112(a) of the Customs Act, 1962 ( the Act for short) not be imposed on the p .....

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ction 123 of the Act applies and that therefore, in terms of the 3rd proviso to Section 127B of the Act, the Settlement Commission would have no jurisdiction to entertain application of the petitioner for settlement. 2.2 The Commission passed its impugned order dated 15.12.2015 and relying on the decision of the Delhi High Court in case of Additional Commissioner of Customs Vs. Ram Niwas Verma, reported in 2015 (323) ELT, page N.424, dismissed petitioner's application. 3. In case of Special .....

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and misdeclaration with respect to the same, the value of the goods should not be redetermined and redemption fine in view of confiscation not be imposed. The petitioners were also called upon to show cause why differential duty should not be recovered with interest and penalties. 3.1 Pending such proceedings, the petitioners applied to the Settlement Commission under application dated 14.08.2015 for settlement of the case. On this application also, the Settlement Commission passed the impugned .....

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would be ousted and not otherwise. They pointed out that the Special Bench of the Settlement Commission had interpreted the said proviso in case of Idris Y.Porbunderwala, reported in 2005 (186) ELT, page No.356 (Sett. Comm.) by holding that invocability of the provisions of Section 123 is an essential ingredient to determine the applicability of the said section to the seized goods so as to decide whether the mischief of the third proviso to sub-section (1) of Section 127B of the Act would come .....

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r.) has independently taken a similar view. They submitted that in any case, in Special Civil Application No.3144 of 2016, there was seizure of gold on the premise that the shifting of gold outside of SEZ area would amount to smuggling and therefore, even if the interpretation of the petitioners were to be accepted, the petitioners' case would be covered within the exclusion clause contained in the 3rd proviso to sub-section (1) of Section 127B of the Act. 6. In order to resolve the controve .....

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ction (1) thereof, which is relevant for our purpose, reads as under:- (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 liability which has not been disclosed before the proper officer, th .....

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unless- [(a) the applicant has filed a bill of entry, or a shipping bill, or a bill of export, or made a baggage declaration, or a label or declaration accompanying the goods imported or exported through post or courier, as the case may be, and in relation to such document or documents, a show cause notice has been issued to him by proper officer;] (b) the additional amount of duty accepted by the applicant in his application exceeds three lakhs rupees; and (c) the applicant has paid the additi .....

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of 1985) has been committed: Provided also that no application under this sub-section shall be made for the interpretation of the classification of the goods under the Customs Tariff Act, 1975 (51 of 1975). 7. In terms of sub-section (1) of Section 127B thus, any importer, exporter or any other person may, in respect of a case relating to him, make an application to the Settlement Commission making full and true disclosure of his duty liability and the manner in which such liability has been inc .....

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properly imported goods. Section 112 pertains to penalty for improper importation of goods. Various other Sections contained in the said Chapter pertain to confiscation and penalties under different situations of illegal or irregular imports and exports of goods. Section 122 pertains to adjudication of confiscations and penalties. Section 122A provides that adjudicating authority shall, in any proceedings under this Chapter or other provisions of the Act, give an opportunity of being heard to a .....

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and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. (2) This section shall apply to gold, [and manufacturers thereof,] watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify. 9. Under sub-section (1) of Section 123 in case of class of goods .....

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sub-section (1) of Section 127B provides that no application for settlement shall be made in relation to goods to which Section 123 applies. We are not concerned with the later expression contained in the said proviso, viz. to the goods in relation to which any offence of NDPS has been committed. To ascertain to which goods Section 123 applies, one may, therefore, have to peruse Section 123 very minutely. As noted, Section 123 carries title burden of proof in certain cases . Sub-section (1) ther .....

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or the shifting of burden of proof and the conditions under which such eventuality to the class of goods to which the section applies, would arise. Sub-section (2) merely specifies the class of goods to which the section would apply. Thus, class of goods specified in sub-section (2) are those to which the section itself would apply and if the conditions set out in sub-section (1) of Section 123 are satisfied with respect to such goods, the eventualities of shifting of burden on the owner or pers .....

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jurisdiction of the Settlement commission. It has nothing to do with the eventuality of shifting of burden of proof. It is perhaps because of this reason that the Settlement Commission in the Special Bench judgment in case of Idris Y.Porbunderwala (supra) used the expression invocability of the provisions of Section 123 . There is nothing in the 3rd proviso to subsection (1) to Section 127B which would indicate that it envisaged satisfaction of the conditions for invoking sub-section (1) of Sec .....

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on for settlement can be made if it relates to goods to which Section 123 applies. Section 123 sub-section (2) specifically provides that the said Section applies to, inter alia, gold. It is, therefore, clear that when the two provisions are read together, no application under Section 127B(1) can be made in relation to gold. This case clearly pertains to gold. The respondent made an application, nevertheless, to the Settlement Commission which has entertained the same and has also rejected the p .....

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oner of Customs v. Ashok Kumar Jain: 2013 (292) ELT 32 (Del) as also a subsequent decision of another Division Bench of this Court in Komal Jain v. Union of India and Another: 2014 (304) ELT 675 (Del). In Ashok Kumar Jain (supra), the issue of Section 123 has not been considered at all. Insofar as the decision in Komal Jain (supra) is concerned, the Division Bench itself, in paragraph 21, observed that the issue with regard to the applicability of Section 123 of the Act by way of the third provi .....

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accordance with law. A plain reading of the provisions clearly indicates that an application under Section 127B cannot be made in respect of, inter alia, gold, which is specifically an item to which Section 123 applies. We may point out that there is no question of examining the provisions of Section 123(1) as also its applicability because that is not the context of the third proviso to Section 127B(1). The said proviso only makes a reference to the goods to which Section 123 applies and not to .....

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pra) had also adopted this line of reasoning observing as under:- 9. Merely because goods in question are exported under a Bill of Entry and as such 3rd proviso would be attracted only to goods imported illicitly or smuggled goods and thereby 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 even in such circumstances, an applicability for .....

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