TMI Blog2023 (5) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... cent. In the present case at hand, the petitioner herein was caught with the impugned goods within the customs area. In such a scenario, where the impugned goods are found on the person of the accused and within the customs area, any chance of the accused being innocent becomes an impossibility, since the illegal act is caught in the heat of the crime. Since the discharge of burden proof, rather, the question of burden of proof itself becomes redundant in cases of seizures within the customs area, by default, the provision that mandates such a task also becomes redundant - While the conflict between the two sets of High Court judgments has been brought to an end, certain other issues flowing from the said interpretation, in our opinion, must also be clarified. Judgment rendered by the High Court of Bombay in the SURESH L. RAHEJA [ 2010 (10) TMI 726 - BOMBAY HIGH COURT] expounds the correction position of law, and we concur and approve the same. Whether any person who importing the impugned goods at the instance of another person, is a smuggler, and as such, the Settlement Commission cannot be approached in such cases? - HELD THAT:- In the case of Tata Teleservices (Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prohibitions within the law. On a plain reading of Sections 127B and 123, it is evident that the proviso to Section 127B(1) specifies certain categories of goods are barred from the jurisdiction of the settlement commission. These include goods mentioned under Section 123 and goods relating to the NDPS Act. Therefore, recourse under Section 127B cannot be made if any of the above goods are involved 23.Even without any controversy about the origin of the goods, Section 127B of the Act would not apply for settlement in respect of the goods enumerated under Section 123 as this goes against the statutory scheme of penal consequences for committing certain offences such as for evading duty, as alleged in the present case, under Section 135 - Hence, the contention of the Petitioner that the legislative intent is for settlement of all cases cannot be accepted. In the present case, the recovery from the Petitioner was on crossing the green channel at the Delhi airport on 05.10.2022, wherein the officers of the Investigating Agency apprehended him with dutiable goods, including watches of admitted foreign origin. Watches is one of the categories of goods mentioned in Section 123 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission under Section 127 of the Customs Act, by paying the dues and any interest accrued thereon to the customs department in accordance with law. However, for a want of notice by the customs authorities to initiate the settlement process, the petitioner filed an I.A. seeking the same. 5. In the abovementioned I.A. filed by the petitioner, an ex-parte order dated 20.02.2023 was passed by this Court, wherein the Commissioner of Customs was directed to issue a show-cause notice to the petitioner, to initiate the proceedings. 6. The respondent then, on being served the abovementioned ex-parte order, filed an application for a recall of the said order. Several grounds were raised on the issue of jurisdiction of the Settlement Commission to hear the said matter. Both the parties were heard at length, and vide order dated 20.02.2023, the said ex-parte order was recalled. 7. After the recall of order passed by this Court, both the parties argued at length on merits, and during the course of the said arguments, an apparent conflict between two judgments of the Bombay High Court and the Delhi High Court was brought to our notice by the petitioner, by way of an application for pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me saving remedy, that would not only help the government in helping reclaim the tax amounts due, but also incentivize persons to do the same. It is out of these considerations that the Settlement Commission was born, and as such, this backdrop must always be kept in mind while adjudicating on issues of jurisdiction of the Settlement Commission. PRELIMINARY OBJECTION 11. During the course of the hearing, a preliminary objection has been raised by the learned counsel appearing on behalf of the respondent stating that since the original relief sought for was limited to the grant of providing home cooked meals to undertrial prisoners, this court is not the appropriate forum to decide on the present question of law and resolve the conflict between the two High Court judgments. 12. In the present case at hand, as has been mentioned above, the learned counsels appearing on behalf of both the parties have argued at length on the merits of the case and the point of law in question. The said ambiguity in the impugned point of law, caused by the conflicting decisions the two High Courts, has the potential to cause great harm to the fundamental rights of accused persons presentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other rights conferred by it, has placed civil and individual liberties at the highest pedestal. These civil and individual liberties, that act as a sword and a shield against the state, find their translation from ideal to enforceable rights through Part III of the Constitution. 17. One such right under Part III of the Constitution, which shields its people from the tyranny of the state, is Article 32 of the Constitution, which in itself is a fundamental right falling within part III of the constitution, that exists to protect other fundamental rights. By way of Article 32, any action of the state that violates the fundamental rights of a person, or causes harm to civil or individual liberties, is within the purview of scrutiny of the Court. 18.During the constituent assembly debates, when the question of the ambit of Article 32, which was then Article 25 of the draft constitution, was posed, the makers of the Constitution deliberated extensively on the scope of the said article and the extent of its powers. It was during these debates when Dr. B.R Ambedkar, very famously stated that Article 32 is the very soul of the constitution. The said quote by Dr. B.R Ambedkar is being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fundamental rights and the placing of them under the protection of the High Court. It is because we believe that the fullest and the most integral definition of democracy includes and is based upon this sacredness of the individual, of his personality and the claims of his conscience, that we have framed these rights. I say, Sir, further that in the last analysis we have to make an appeal to a moral law and through the moral law to a Supreme Being, if the highest and the fullest authority is to be given and the most stable sanction to be secured for these fundamental rights. Sir, Mahatma Gandhi, in one of his unforgettable phrases, referring to the desire to have a secular Constitution and to avoid the name of the Supreme Being in it, cried out, You may keep out the Name, but you will not keep out the Thing from that Constitution . And, Sir, I believe that these fundamental rights and their implications are really tantamount to a confession that beyond human agencies and human legislatures there is a Power which has to be submitted to, and there are rights which have to be respected. By this article we give to our Supreme Judicature a power, a status and a dignity wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods through the green channel of entry. The seizure of the impugned goods therein, similar to the present case at hand, was conducted within the customs area. Subsequent to the seizure, the petitioner therein was amenable to settle the dues, and seek relief under Section 127 of the Customs Act, however, the goods seized were explicitly mentioned in Section 123 of the Customs Act, which put a bar on settlement of cases under Section 127 B of the said Act. The relevant paragraph of the said judgement is being extracted herein:- It is further required to be borne in mind that in so far origin of the goods is concerned, there is no dispute in respect of both the jewellery as well as the watches. Therefore, the contention of the Petitioner that the Respondents had failed to discharge the burden cast by Section 123 of the said Act is mis-founded. Once the origin of the goods was not in dispute, the Respondents as held by the Settlement Commission were entitled to invoke the jurisdiction of the Settlement Commission and, therefore, the bar contained in the proviso to Section 127B could not have come in their way. The finding of the: Settlement Commission in the aforesaid factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 2[and manufactures thereof] watches, and any other class of goods which the Central Government may by notification in the Official Gazette, specify. 127B Application for settlement of cases. (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, the manner in which such liability has been incurred, the additional amount of customs duty accepted to be payable by him and such other particulars as may be specified by rules including the particulars of such dutiable goods in respect of which he admits short levy on account of misclassification, under-valuation or inapplicability of exemption n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods within the customs area. In such a scenario, where the impugned goods are found on the person of the accused and within the customs area, any chance of the accused being innocent becomes an impossibility, since the illegal act is caught in the heat of the crime. 30. Since the discharge of burden proof, rather, the question of burden of proof itself becomes redundant in cases of seizures within the customs area, by default, the provision that mandates such a task also becomes redundant. In light of the abovementioned discussion therefore, in cases of seizure within the customs area, Section 123 of the Customs Act cannot apply and hence, the decision in the Suresh Judgement (Supra) passed by the High Court of Judicature at Bombay states the correct position of law. It must also be noted that the abovementioned decision of the High Court of Bombay was impugned in appeal before this Court, and vide order dated 14.09.2011, this Court had concurred with the decision of the High Court and dismissed the appeal of the revenue. Since the facts and circumstances of the case herein are identical to the abovementioned case, we find no cogent reason to take a different view herein. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f settlement, in light of our observation that an entry through the green channel mode implies a declaration of Nil goods under Section 77 of the Act , the provision of settlement would become irrelevant and defunct, since no accused would ever be able to avail the benefits of settlement. 38. Therefore, in light of the above discussion, we see no reason as to why such a person cannot opt for a statutory remedy of settlement, and therefore reject the objection of the respondents in this regard. 39. We then come to the last issue that warrants our consideration. The learned counsel appearing on behalf of the respondent contended that any person who importing the impugned goods at the instance of another person, is a smuggler, and as such, the Settlement Commission cannot be approached in such cases. 40. This contention made by the learned counsel appearing on behalf of the respondents, in our opinion, is also bad in law. In the case of Tata Teleservices (Maharashtra) Ltd vs Union Of India 2006 (201) ELT 529 (Bom) , the High Court of Judicature at Bombay, while deciding on a similar issue,by relying on the Constitution Bench judgment of this court in the case of Lilavati B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023 JUDGMENT SANJAY KAROL, J. 1. I have perused the erudite opinion proposed by my esteemed brother, Hon ble Mr. Justice Krishna Murari. Respectfully, I am unable to persuade myself to agree; hence, I separately pen down my conclusions. 2. Two issues arise for consideration before us; One whether a settlement remedy under Section 127B of the Customs Act, 1962, would be available for the seized goods, which are specified under Section 123 of the said Act? Two, would, in the attending facts, the exercise of powers under Article 32 of the Constitution of India be appropriate? Nature, Scope, Purpose and Scheme of Customs Act 3. The Customs Act, 1962 (hereafter referred to as the Act) was enacted to consolidate the provisions relating to sea customs, land customs and air customs into one comprehensive measure. It is an act to sternly and expeditiously deal with smuggled goods and curbs the dents on the revenue thus caused. The act provides for the confiscation of goods and imposition of penalties when any goods are imported contrary to prohibitions imposed [Commissioner of Customs v. M. Ambalal, (2011) 2 SCC 74 (2Judge Bench)]. 4. To understand the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35; may extend to seven years). 16. Given the above, it is evident that the scheme of the act involves the imposition of customs duty, confiscation of goods and consequences of skirting or attempting to skirt the same in the form of varied penal consequences, including imprisonment. This follows the purpose of the Act, as noted by this Court in Ambalal (supra), which is to sternly and expeditiously deal with goods smuggled into India in contravention of the prohibitions within the law. 17. Considering the intention of the Act as above, I now discuss the sections pertaining to the controversy at hand: Section 123 and Section 127B of the Act. 18. Section 123 of the Act elucidates the burden of proof in certain cases. It reads as follows: 123. 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 perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed also that no application under this subsection shall be made in relation to goods to which section 123 applies or to goods in relation to which any offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985) has been committed : Provided also that no application under this subsection shall be made for the interpretation of the classification of the goods under the Customs Tariff Act, 1975 (51 of 1975). (Emphasis Supplied) 20. The Petitioner contends that Section 123 of the Act would not apply in the present case for Settlement, as the goods of admitted foreign origin stand seized within the customs area upon crossing the green channel. The Petitioner has placed reliance on the judgment of the Bombay High Court in Union of India v. Suresh Raheja, 2011 (267) E.L.T. 487 (Bom.), wherein the High Court observed that in a situation where there is no dispute as to the origin of the goods, the bar contained in the proviso to Section 127B would not come in the way, in respect of the specified goods under Section 123. 21. Furthermore, the Petitioner contends that the legislative object is to open doors for settlement and not to rigidly construe beneficial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances Act, 1985, redundant. Importantly, as a consequence of such an interpretation being accepted, the power to prohibit the importation of goods for the maintenance of security of India under Section 11, the powers of arrest under Section 105, the power to summon under Section 108, confiscation under Section 111 and offences for which imprisonment may be given from Sections 132 to Section 135 would have no application, thereby making the respective legislative provisions in effect, null. As prayed for by the Petitioner, such an interpretation would allow a person importing goods without declaration to evade confiscation and criminal prosecution by simply taking recourse under Section 127B. The deterrent of criminal prosecution would stand vitiated. It is observed that the Delhi High Court has taken a view contrary to that taken by the Bombay High Court in this regard. 26.1 In Additional Commissioner of Customs v. Ram Niwas Verma, 2015 SCC Online Del 11542 (2 - Judge Bench of the Delhi High Court), there was a recovery of 6452 grams of gold from the Respondent therein. He was crossing through the green channel but was intercepted by the Customs Officer. The Court stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per law. Writ Jurisdiction under Article 32 28. I have considered the law on the merits of the dispute; however, it is also essential to consider the maintainability of the present proceedings since the Petitioner has invoked Article 32 of the Constitution of India. 29. It is well-settled law that this Court has wide powers when the violation of fundamental rights is alleged under Article 32 of the Constitution. However, such intervention must be made on a case-by-case basis and only when a fundamental right question arises. 30. In Northern Corporation v. Union of India, (1990) 4 SCC 239 (2 - Judge Bench), this Court dealing with the issue of enforcement of the provisions of the Customs Act, in a petition filed under Article 32, observed that the Petitioner has no fundamental right as such to clear any goods imported in accordance with the law. Furthermore, it was held that it could not be contended that enforcing provisions of the Act would breach fundamental rights which entitle a citizen to seek recourse to Article 32 of the Constitution. Therefore, the writ petition was rejected. 31. In Dalip Singh v. State of U.P. Ors., (2010) 2 SCC 114 (2Judge Bench), the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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