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TMI Blog2015 (8) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... -Minh Sarani, Kolkata - 700071 ('DRI' for short) answerable to the Commissioner of Customs (Port), Kolkata Customs House, 15/1 Strand Road, Kolkata - 700 001 (hereinafter referred to as 'the jurisdictional Commissioner' for short). 2. It has been alleged in the SCN that the applicant, holder of IEC No. 0398024545, had imported 280097 Mtr. (412639.5 Sq. mtr/30623 kg) Polyester Knitted Fabric valued at Rs. 1,36,60,084.91 through Kolkata Port through four Bills of Entry Nos. 7299977, dated 4-7-2012, 7341160, dated 9-7-2012, 7415146, dated 17-7-2012 and 7428384, dated 18-7-2012 (hereinafter referred to as the said BEs) without payment of duty under two Advance Licences No. 0510327957 & 0510327963 both dated 20-6-2012 issued by DGFT, Delhi (hereinafter referred to as the 'said licences), availing exemption in terms of Customs Notification No. 96/2009, dated 11-9-2009 (hereinafter referred to as the 'said Notification). Total amount of duty foregone in respect of the above four consignments has been calculated as Rs. 39,41,186/-. 2.1 The actual importers of the said four consignments are two Kolkata based merchant exporter firms' viz. Vinod Kumar Jain, Prop. of M/s. R.K. Impe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (S121-169/2004 SIB, dated 19-7-2013 and Rs. 10,00,000/- through Demand Draft No. 166365, dated 9-7-2013) drawn on IndusInd Bank, New Delhi. 3. On completion of investigations, SCN was issued whereby the applicant was called upon to show cause to the Commissioner of Customs (Port), Kolkata Customs House, 15/1 Strand Road, Kolkata - 700 001 as to why : (i) The imported goods i.e. Polyester Knitted Fabric 280097 Mtr. or 412639.5 Sq. mtr. having declared assessable value Rs. 1,36,60,084.91 imported through Kolkata Port vide said BEs without payment of duty under the said licences availing exemption in terms of the said Notification should not be held liable for confiscation under Section 111(o) of the Act; (ii) The amount of duty foregone amounting to Rs. 39,41,186/- in connection of importation of the above-mentioned four consignments under Advance License availing exemption under the said Notification and in respect of which the condition laid down in the said Notification were violated, should not be demanded and recovered in terms of Section 28(4) of the Act inasmuch as the said consignments were cleared on the basis of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our goods in the category of synthetic yarn (S. No. 4) of Fabrics made wholly or mainly of Synthetic Yarn (S. No. 5). That it is humbly submitted that the goods so imported by the applicant are Polyester Knitted Fabric classifiable under CTH 6006 32 00. That it is humbly submitted that in the present case, the classification of the impugned goods are not in dispute. That it is further submitted that the impugned goods are not synthetic yarn or fabrics made of synthetic yarn. That thus as the impugned goods are not amongst the notified goods the bar to filing settlement is not applicable. That without prejudice to the above made submission even if the Hon'ble Bench assumes that the said goods are notified goods as per Section 123 of the Act it is humbly submitted that there is per se no blanket bar on maintainability of an application for goods notified under Section 123 of the Act. That it is humbly submitted that the bar is applicable where there is reasonable belief that the impugned goods have been smuggled. That it is humbly submitted that in the present case, the case of the department is not that the goods have been smuggled. As far as the import of the goods is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2500/- on 16-2-2015, i.e. after submission of settlement application, the differential amount payable by the applicant comes to Rs. 3,16,857/- (Rs. 3,19,357 - Rs. 2,500). 7. Vide this office letter dated 2-7-2015, the jurisdictional Commissioner has been requested to confirm deposition of Rs. 2500/- made by the applicant on 16-2-2015. 8. The case was scheduled for hearing on 10-7-2015, but was postponed to 24-7-2015, as the applicant sought adjournment. 9. On 24-7-2015, Shri Ashish Batra, advocate, appearing on behalf of Shri Rahul Ahuja, Proprietor of M/s. Multitrade Overseas, New Delhi, submitted that they have already made out a Demand Draft for Rs. 3,19,357/- which has been despatched from Delhi to Kolkata to be submitted to the jurisdictional Commissioner for depositing the same in the Government Treasury through TR-6 Challan. According to Shri Batra, the delay in depositing the balance amount is due to the time taken in generating TR-6 Challan, Shri Batra, advocate, submitted a copy of the Demand Draft. Shri Ashish Batra, advocate, on perusal of the description of the goods in question classified under CTH 6006 32 00 and the notes to Chapter 54 of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. J.K. Steel Ltd. v. Union of India reported in 1978 (2) E.L.T. J355 (S.C.) and the decision of the Hon'ble High Court of Gujarat at Ahmedabad in the case of Sanjay Vimalbhai Deora v. CESTAT reported in 2014 (306) E.L.T. 533 (Guj.) the plea of Shri Ashish Batra, advocate is not tenable. The petition for Special Leave to Appeal (Civil) No. 23930 of 2012 filed by Shri Sanjay Vimalbhai Deora against the said judgment was dismissed by the Hon'ble Supreme Court vide its Order dated 1-11-2013 = 2014 (309) E.L.T. A131 (S.C.). 9.4 Bench has examined the judgment of the Special Bench of the Settlement Commission in its Order No. 1/2005-Cus., dated 7-6-2005 in the matter of Idris Y. Porbunderwala [2005 (186) E.L.T. 356 (Sett. Comn.)] Special Bench of the Settlement Commission while answering the question : - "(a) Whether applications, per se, are barred in relation to goods which are listed under sub-section (2) of Section 123 or are notified under the said sub-section?" held that the applications per se are not barred in relation to goods which are listed or notified under sub-section (2) of Section 123 of the Act. Bench has also examined Section 123 of Customs Act, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were seized. These may be relevant to other provisions of the Customs Act, 1962, but so far as the bar under the third proviso to sub-section (1) of Section 127B is concerned, the goods in relation to which the application has been filed, simply need to be notified by Section 123. 12. The Bench finds that fulfilling these three conditions is relevant and crucial to fasten the burden of proof, but a complete and total compliance of all these three conditions is not envisaged in the third proviso to sub-section (1) of Section 127B of the Customs Act, 1962, which debars applications for settlement relating to certain class of goods. The third proviso to sub-section (1) of Section 127B of the Customs Act, 1962, only states that no application under the sub-section shall be made in relation to "goods" to which Section 123 applies. The application of Section 123 is specified in sub-section (2) of Section 123, which reads : "This section shall apply to gold (and manufactures thereof,) watches and any other class of goods which the Central Govt. may by notification in the Official Gazette specify." 13. This has been clarified by the Hon'ble High Court of Karnataka at Bangal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that : "A literal construction would not be denied only because the consequences to comply with the same may lead to a penalty. The Courts should not be over zealous in searching for ambiguities or obscurities in words which are plain." Hon'ble Supreme Court in Grasim Industries Ltd. v. Collector of Customs, Bombay [(2002) 4 SCC 297 = 2002 (141) E.L.T. 593 (S.C.)] has followed the same principle and observed : "Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for Court to take upon itself the task of amending or altering the statutory provisions." (para 10). 15. The interpretation of the provisions as arrived at by the Special Bench also does not appear to be in consonance with the intention of Legislature in introducing Section 178A in the Sea Customs Act, 1878, which has been continued in the Customs Act, 1962 as Section 123. 16. The intention of the Legislature has been succinctly brought out by the Constitution Bench of the Hon'ble Supreme Court of India in the matter of Collector of Cus., Madras v. Nathella Sampathu Chetty - 1999 (110) E.L.T. 157 (S.C.) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Burden of proof in certain cases. - (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; 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 manufactures thereof), watches and any other class of goods which the Central Government may by notification in the Official Gazette specify." 19. Thus, it is clear that the provisions as contained in Section 123 of the Customs Act, 1962, and in Section 178A of the erstwhile Sea Customs Act, 1878, were specifically introduced to protect the national economy with a view to tightening the law to effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a fiscal statute, has to be necessarily construed strictly in our considered view, the scope of the proceedings cannot be unduly enlarged. Court has also been held that "when the applicant seeks to avail benefit of settlement, the provisions of Sections 127A and 127B are to be strictly construed. There is no force in the contention of the learned counsel for the appellant that the provisions are to be liberally construed". (Para - 26) 23.3 The Hon'ble High Court of Delhi in the case of Commissioner of Customs v. Ashok Kumar Jain, reported in 2013 (292) E.L.T. 32 (Del.), in Para-11 has ruled that "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 like in case of third proviso of Section 127B(i)". 23.4 The issue to be decided by the Court in this case was whether cases of baggage where no Bill of Entry or Shipping Bill had been filed can be settled by the Settlement Commission since they do not involve short-levy or non-levy. 23.5 Earlier in Para-9 of the said judgment, the Hon'ble High Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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