TMI Blog2018 (1) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to the powers of the Commission, are clear and self explanatory. The Revenue was told to take appropriate action at its end. We do not see how the Revenue, when being in receipt of such communication from the Commission, could have pursued the action in terms of the impugned letter dated 10th April, 2017. The Revenue knew where it stands and in the scheme of the law. If it has not raised the contentions in the affidavitinreply or in the communication to the Settlement Commission during the proceedings or post its final order dated 2nd March, 2017, then, in the facts and circumstances of this case, it is alone to be blamed. It must blame itself if it has not conducted the proceedings before the Commission in the manner demanded by the statute or its report or its conduct of the proceedings was deficient in any manner. In the Petition challenging the impugned communication / letter dated 10th April, 2017 at the instance of the petitioner, the Revenue cannot call upon this Court to undertake an exercise which stands concluded by the final order of the Settlement Commission dated 2nd March, 2017. More so, when the said final order is not challenged by the Revenue in subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We should note a few facts necessary to deal with the rival contentions. 6. The petitioners are a company registered under the Companies Act, 1956, now, the Companies Act, 2013. The 1st respondent is the Union of India and the 2nd respondent is the Directorate of Revenue Intelligence (DRI) which is functional in terms of one of the statutes involved, namely, the Customs Act, 1962. The 3rd respondent is the Settlement Commission set up under Section 127B of the Customs Act, 1962. 7. The petitioners are inter alia engaged in import and trading of various electronic equipments, including television sets. The relevant period is April 2011 to February 2015. The petitioners were importing television sets of various sizes and models manufactured by M/s. Sony, Malaysia. 8. At the time of import, the petitioners claimed the benefit of concessional rate/exemption from Basic Customs Duty under a notification, details of which are mentioned in paragraph 7 of the Petition. It is claimed that certain Rules were framed so as to give effect to an agreement on the comprehensive economic cooperation between India and Association of Southeast Asian Nations. The petitioners state that exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated that this application was accepted by the 3rd respondent and it was listed for hearing on 14th December, 2016. The contention is that the 2nd respondent, before, during or after the hearing, did not allege that complete or full payment of interest has not been paid by the petitioners. After the proceedings concluded, the Commission made the following order: 8.1 Customs Duty: The differential Customs duty is settled at ₹ 370,56,79,329/ . Applicant had deposited ₹ 300.00 crores during investigation and paid the balance amount subsequently. The deposit of ₹ 300.00 crores and balance amount paid subsequently are appropriated towards their duty liability. As the applicant has already paid the entire duty, no further liability subsists on this account. The duty settled herein includes differential duty of ₹ 79,65,52,147/payable by the applicant on the 187 Bills of Entry provisionally assessed which now stand finally assessed as proposed in the SCN. 8.2 Interest: The applicant have deposited ₹ 1,14,54,59,876/ towards interest which is directed to be appropriated. The Revenue is directed to verify the applicable interest on the set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Senior Counsel appearing on behalf of the petitioners would submit that this order finalizes the assessment of provisionally assessed Bills of Entry. There is nothing in the order which would indicate that any interest in respect of the same is payable. The petitioners have paid the penalty adjudged and reported compliance of the same to the 3rd respondent. Thus, the final order dated 2nd March, 2017 issued by the 3rd respondent was complied with. 14. It is the complaint of the petitioners that after this order was issued and duly implemented, the impugned communication has been received. 15. The impugned communication, copy of which is at annexure A (page 23 of the paper book), reads as under : F.No.DRI/MZU/NS/ENQ 102/2014/3322 Date 10.04.2017. To, M/s. Sony India Pvt. Ltd. A 31, Mohan Cooperative Ind. Area Mathura Road, New Delhi 110044 Gentlemen, Sub Order No.27/FINAL ORDER/CUS/KNA/2017 dated 02.03.2017 passed by the Hon'ble Settlement Commission, Mumbai Reg. Please refer to the above Final Order dated 02.03.2017 passed by the Hon'ble Settlement Commission, Additional Bench, Mumbai on an application filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue to this order of the Settlement Commission. Further, the Revenue filed a report dated 20th October, 2016 before the Settlement Commission accepting that the petitioners deposited interest of ₹ 114,54,59,876/ payable on the differential duty. The only liberty that was reserved by the Revenue pertains to any discrepancy found in the calculation of this sum of interest. The Revenue did not report any such calculation or computation error. Thus, there was no discrepancy in the calculation of interest. 17. It is clear from the provisions of the Act, and particularly Section 127H(1) of the Customs Act, 1962 that the Settlement Commission has power only to grant immunity from penalty and prosecution for any offence under the Customs Act, 1962. It has no power to grant immunity from payment of any duty or interest. Albeit, the Settlement Commission in regard to the case before it, can exercise all the powers of the Customs Officers and that is clear from the language of Section 127F(1). Mr. Sridharan would submit that the settled position in law is that the Commission has to pass an order in accordance with the provisions of the Customs Act, 1962 and in that regard he relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eavily rely upon the observations in the judgment of this Court to which one of us (Shri S. C. Dharmadhikari, J.) was a party, rendered in the case of CEAT Limited vs. Commissioner of Central Excise Customs, Nashik, reported in 2015 (317) Excise Law Times 192 (Bom.). He would submit that the Revenue brought a Special Leave Petition to challenge this judgment and order which Special Leave Petition has also been dismissed by the Hon'ble Supreme Court. 22. On the other hand, Mr. Jetly appearing for the respondents, particularly respondent nos. 1 and 2, relies upon the affidavit in-reply to this Petition. He would submit that it is correct that the Settlement Commission passed an order on 2nd March, 2017. However, the petitioners had not paid any interest on the differential duty of ₹ 79,65,52,147/ arising out of the finalization of the provisionally assessed 187 Bills of Entry vide the impugned order of the Settlement Commission. Though the finalization comes under the order of the Settlement Commission, the payment of interest which is statutorily payable, was not done. That is how the communication was issued. The petitioners had responded to that communication b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962. Pertinently, this communication from the Deputy Director on behalf of the Directorate of Revenue Intelligence, Nhava Sheva Unit refers to the order of the Settlement Commission dated 2nd March, 2017 as an impugned order. We do not see anybody has impugned this order at least on the date of issuance of this communication dated 10th April, 2017. This is a clear pointer to what the Revenue understands that order to be and its complaint thereagainst. For that purpose, if we refer the proceedings before the Settlement Commission, it would be clear that the Commission had before it, the application of the petitioner. The application of the petitioner prayed for the following reliefs: a) accept the amount of ₹ 370,56,79,329/ as submitted above along with applicable interest of ₹ 114,54,59,876/ and admit settle the application filed by the Applicant; b) grant waiver of penalty leviable under the Customs Act in full; c) to direct the Common Adjudicating Authority, namely the Additional Director General (Adjudication), Directorate of Revenue Intelligence, Mumbai, not to proceed further with the subject matter including passing of adjudication ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 114,54,59,876/ towards interest payable on the said differential duty amount. The interest so paid by the applicant prima facie appears to be correctly paid. However, any discrepancies found in the calculation will follow the natural course of intimation to the Hon'ble Commission, separately. 26. Then, the Settlement Commission makes a reference to the report and says that the DRI has no objection to the settlement of the applicants' case subject to the following : (a) confirmation of entire amount of differential duty with interest; (b) imposition of appropriate penalty and personal penalty, and (c) any other order as the Settlement Commission may deem fit. 27. Then, the pleas raised by the parties are noted. After para 8, the operative order of the Commission reproduced above has been passed. Thus, the Bench takes note of the fact that the parties like the petitioners have cooperated with it and made a true and complete disclosure of their liabilities and the Commission is inclined to settle their cases under Section 127C(5) of the Customs Act, 1962 by granting partial immunity from penalties in the terms noted in its operative order. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive demand. That is something which we do not find to be permissible and sustainable in the given facts and circumstances. 32. We do not see how we can be called upon in such circumstances to decide any wider question or a larger issue. All that we are concerned with is the sustainability of the impugned communication. We find that once the final order of the Commission has been accepted by both sides, particularly by the Revenue, and not challenged, could the Revenue have, after appropriation and adjustment in terms of this final order, called upon the petitioner to pay interest on the differential duty payable on provisionally assessed 187 Bills of Entry. If that was the remaining or the outstanding issue, the Commission would have notified the same during the course of its proceedings. Section 18 of the the Customs Act, 1962 has been relied upon. Section 18 of the said Act is to be found in Chapter V titled as Levy of, And Exemption From Customs Duties . Section 18 follows Sections 12 to 17 which refer to 'dutiable goods', 'duty on pilferred goods', 'valuation of goods', 'date for determination of rate on duty and tariff valuation of imported good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chemical or other test, or where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further inquiry, or where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further inquiry, then the proper officer can direct that the duty leviable on such goods be assessed provisionally and if the importer or exporter, as the case may be, furnishes such security as he deems fit for the payment of deficiency, if any, between the duty as may be finally assessed or reassessed, as the case may be, and the duty provisionally assessed. Thus, the deficiency in the duty as may be finally assessed or reassessed, as the case may be, and the duty provisionally assessed has to be cleared by furnishing security. The consequences of final assessment and the re assessment are set out in Sub section (2) and then follows Sub section (3) which has been inserted by the Act 29 of 2006 with effect from 13th July, 2006. There, the liability to pay interest arises and on any amount payable to the Central Government, consequent to the final ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated 10th April, 2017, the petitioner was requested to pay the interest on the said differential duty arising out of the provisionally assessed Bills of Entry. Then, the response of the petitioner to this communication is set out. It is expressly stated in para 5.1 that the petitioner seeks assistance and takes shelter of the decision of this Court in the case of CEAT Ltd. (supra) and its stand that the interest provision under the Customs Act, 1962 was similarly worded to the interest provision under the Central Excise and no interest can be charged on such differential duties which are prior to finalization of the provisional assessment. However, in the opinion of the Revenue, there are decisions to the contrary. It is in these circumstances that the Revenue says that though the petitioner has paid the differential duty before the final assessment, but that does not absolve them from paying interest on the same. The payment of differential duty before final assessment is the choice of the petitioner and hence, it is required to pay interest for the period from the first day of the month succeeding the month in which the duty is provisionally assessed till the date of pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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