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TMI Blog2022 (5) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... eby directing the Settlement Commission, Delhi to allow deduction claimed by the Petitioner, and accordingly, modifying the amount of settlement at Rs.1,94,48,576/- for settling the application of the Petitioner; (C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to restrain the respondents, their servants and agents from recovering any amount from the petitioner in excess of Rs.1,94,48,576/- pursuant to Final Order No.F-3458-3459/CUS/2018 SC (PB) dated 26.12.2018 made by the Settlement Commission, Delhi and also stay the operation of letter dated 09.01.2019 (Annexure-"M"); (D) An ex-parte ad-interim relief in terms of Para 32(c) above may please be granted. (E) Any other further relief that may be deemed fit in the facts and circumstances of the case may also be granted." 2. The facts, giving rise to this writ application may be summarized as under; 2.1 The writ applicant is a proprietary concern engaged in the business of trading of goods in the nature of PU Leather Fabric and Material. The goods after being imported by the writ applicant from various countries and those are, thereafter, sold in the local market. For the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal provision, the writ applicant filed the required TRANS-1 Form thereby claiming the input tax credit on the quantum of the CVD and SAD paid at the time of the import of goods. 2.6 However, in the meantime, on import of one such consignment being the B/E No.2088636 dated 14.06.2017, investigations were initiated by the DRI authorities on the basis of the allegations that the value declared by the writ applicant for the said consignment was not proper and correct. On the basis of such investigations, the department alleged that the goods imported under the said Bill of Entry as also various other Bills of Entry in the past, were not of the Stock Lot but were of the prime quality and therefore, the value declared by the writ applicant was incorrect and improper and differential duty was required to be paid by the writ applicant on the enhanced value of such imports. Pursuant to the said investigation, a show cause notice dated 11.12.2017 came to be issued to the writ applicant alleging undervaluation on the import of the PU Leather under 19 Bills of Entry filed during the period between January, 2017 and June, 2017. On the basis of the said show cause notice, the department raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,07, 03,348/- (Rupees Three Crore Seven Lakh Three Thousand Three Hundred Forty Eight Only) in respect of the 19 consignments, as detailed in the Annexure-I, evaded by the writ applicant on the said goods, should not be demanded and recovered from the writ applicant under Section 28(4) of the Customs Act, 1962 along with the interest applicable under the provisions of Section 28AA of Customs Act, 1962. (viii) Rs.1,68,69,000/- paid/cash security deposited by the writ applicant during the course of the investigation should not be adjusted and appropriated against the differential duty & other dues demanded from the writ applicant at sub para (vii) above. (ix) Penalty should not be imposed on M/s. Pradeep Impex, Delhi under Section 114A of the Customs Act, 1962. (x) Penalty should not be imposed on Shri Pradeep Jindal under Section 112 (a) of the Customs Act, 1962. (xi) Penalty should not be imposed on Shri Pradeep Jindal under Section 114AA of the Customs Act, 1962. 2.8 As the writ applicant was inclined to dispute the allegations levelled by the Department, he thought fit to file an application dated 23.03.2018 before the Settlement Commission, Mumbai thereby accepting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reby holding that the writ applicant had made true and full disclosure of its liabilities and had co-operated in the proceedings before the Commission. However, the Commission rejected the argument of deduction raised by the writ applicant and concluded that the entire amount of duty demanded in the show cause notice was payable by the writ applicant along with interest, as calculated and communicated by the respondent commissioner. The Commission held that the duty component is required to be paid within a period of 15 days from the date of receipt of the said order and the amount of interest is required to be paid within 15 days from the date of communication of the calculation of interest by the respondent commissioner. In addition to the said payment, the Commission gave an option to the writ applicant to pay fine of Rs.1,00,000/- and Rs.6,00,000/- in lieu of confiscation of the goods. As regards the issue of penalty, the Commission imposed a penalty of Rs.15,00,000/- on the writ applicant and granted immunity from penalty in excess of the said amount. Further, immunity from prosecution was also extended subject to the payment of duty, interest, fine and penalty within 30 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erted to the emphasis laid upon the revenue neutrality in the submission and it was expected of giving its reason thereon, lack thereof would prima facie amounts to non application of mind qua the prayer for settlement on the permissible ground. Hence, we are of the view that by ad-interim-relief, the respondents shall be restrained from taking any precipitative action pursuant to the order impugned in this petition. Direct service qua respondent no.3 is permitted." Submissions on behalf of the writ applicant:- 4. Mr. Shalin Mehta, the learned senior counsel assisted by Mr. Paritosh Gupta, the learned advocate appearing for the writ applicant raised a solitary contention that the settlement commission could be said to have committed a serious error in deciding the disputed questions arising in the settlement proceedings. Mr. Mehta would submit that if the amount offered by the writ applicant was not found to be accurate and was disputed by the DRI authorities, the Commission, in such circumstances, could not have taken upon itself to adjudicate on the said issues. It is submitted that the Commission ought to have remitted the matter to the Adjudicating Authority for decidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Settlement Commission, the Settlement Commission becomes functus officio. Hence, in such circumstances, it is not permissible in law for the Settlement Commission to review or revisit its own order. 9. In such circumstances, referred to above, Mr. Vyas prays that there being no merit in the present writ application, the same be rejected. 10. We have also heard Mr. Nikunt Raval, the learned standing counsel appearing for the respondent Nos.1 and 2 respectively. Mr. Raval also submitted that the writ application deserves to be rejected. ANALYSIS 11. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the Settlement Commission committed any error in passing the impugned order. 12. A Division Bench of this High Court speaking through Hon'ble Justice M. R. Shah (as His Lordship then was) in the case of Eagle Corporation Pvt. Ltd. & Anr. vs. Union of India & Ors., reported in (2015) 85 VST 523 has observed in Para-28 of the judgment as under; "The proceedings before the Settlement Commission can be said to be in the form of conciliation and it gives an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the aforesaid aspect as the learned advocate appearing on behalf of the petitioner has made submissions on the same and has vehemently submitted that the proceedings before the Settlement Commission is an alternate proceedings to normal adjudication by the appropriate authority." 13. The Bombay High Court in the case of Fairy Footwear vs. Union of India, reported in (2015) 323 ELT 469, has observed as under; "5. After hearing both sides and perusing the writ petition, we find that the Revenue as also the Commission was keen on maintaining the show cause notice and with some variations. However, the Commission observed that though the bill books contained details of locally procured material, most of the prices related to the imported footwear having Aerosoft brand and that too from foreign supplier. The Commission relied upon the statement recorded under Section 108 of the Customs Act, 1962 wherein the petitioner had agreed to submit original invoices, but the original invoices were not submitted. The differential duty was, thus, worked out without any documents. The petitioner's worksheet was rejected for want of supporting documents and the Commission relied upon paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full and true‟ disclosure of the duty liability. It had also opined on the petitioners‟ failure to disclose the manner in which the said duty liability was derived. Two essential preconditions for invoking jurisdiction of the Settlement Commission were therefore not satisfied. In the given facts, the Settlement Commission should have rejected the settlement applications and referred the case to the Central Excise Officer to decide the show cause notices issued to the parties on merits. However, notwithstanding the failure and non-satisfaction of the jurisdictional preconditions, the Settlement Commission proceeded to act as an adjudicating authority and has decided the show cause notice. This would be beyond the scope and power of the Settlement Commission, for the Settlement Commission is not an adjudicatory authority substituting the Central Excise Officer. The Settlement Commission must function under the four corners of the powers conferred under Chapter-V of the Act. The Settlement Commission, after expressing and recording the finding on the failure of the petitioners to make "full and true‟ disclosure of the duty liability and the manner in which it was der ..... X X X X Extracts X X X X X X X X Extracts X X X X
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