Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home

2009 (8) TMI 47

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... sion directing payment of interest. The submission on behalf of the petitioners has been that no show cause notice as required under Section 28 of the Customs Act, 1962 (hereinafter referred to as the Act) was served on the petitioners. The show cause notice dated 16th June, 2000 only demanded duty and not interest. It is submitted that considering the provisions of Section 127C of the Customs Act, 1962 as the issue of interest was not the subject of the case, the Settlement Commission in directing the petitioners herein to pay interest acted without jurisdiction. 2. A few facts may be stated. The petitioner had imported one Heidelberg Offset Colour printing machine from Germany. The same was purchased through a known person by name Mr. Rajeev Batra of Delhi, who was also in the printing business and deals in purchase and sale of printing machines. According to the petitioner No.2 an amount of Rs.3,80,000/was paid to Shri Rajeev Batra as his commission for arranging purchase and shipment of 72 V speed master printing machine with CPC of 1980 Model available for GBP 55,000. The petitioners were given the certificate dated 29th March, 1999 from M/s. Machinehandel Presto Type Ronde To .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... umbai Zonal Unit and it is set out as under:6 Section 127H of the Customs Act 1961 confers sufficient power on the Settlement Commission to settle the case by granting immunity from prosecution and penalty for any offence under the Customs Act either wholly or in part from the imposition of any penalty, fine and interest subject to such condition as it thinks fit to be imposed. That interest on duty becomes payable from the date it was evaded deliberately and had remained unpaid. Therefore, both in equity and sound commercial practice the person who had obtained financial advantage over the other party by not paying the amount legitimately due to the latter be asked to pay interest on duty to recompensate such party. The printing machinery, it is pointed out, was brought in contravention of the restrictions imposed on old and used machines. There are various other reasons set out which we need not set out. Suffice it to say that it is the stand of the respondents that considering the powers of the Commission it was within the jurisdiction of the Commission to direct payment of interest. The Settlement Commission having granted waiver of penalty in favour of the respondents herein t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... , as the case may be, but for the provisions contained in subsection (2) of Section 28, till the date of payment of such duty. 9. We then come to the provisions pertaining to settlement. Case has been defined under Section 127A(b) to mean any proceedings under this Act or any other Act for the levy assessment and collection of customs duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, An application has to be moved under Section 127B. Section 127C lays down the procedure on receipt of an application under Section 127B. We may gainfully reproduce Section 127C(7) and (9) which read as under: 129C(7)After examination of the records and the report of the Commissioner of Customs received under subsection (1), and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under subsection (6), and after giving an opportunity to the applicant and to the Commissioner of Customs having jurisdiction to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed to in report of the Commissioner of Customs or Commissioner (Investigation) under subsection (1) or subsection (6) of Section 127C. Subsection (9) of Section 127C sets out that every order passed under subsection (7) shall provide for the terms of settlement including any demand by way of duty, penalty or interest. It would, therefore, be clear that ordinarily the Settlement Commission is bound to pass orders in terms of the provisions of the Act. It cannot proceed to pass orders beyond what is set out under the Act. 11. It is in this context that we shall have to examine the scope and intent of Section 28 of the Act. Before examining that, we may consider some of the judgments cited at the Bar. On behalf of the petitioners learned Counsel had placed reliance on the judgment of the Supreme Court in the case of Collector of Customs, Calcutta vs. TIN Plate Co. of India Ltd., 1996 (87) E.L.T. 589 (S.C.). The matter pertains to bills of entries which were presented in December, 1983. Section 28AB as it now stands was not on the statute book at the relevant time. The learned Court on a consideration of the issue as to whether without complying with the requirement of Section 28(1) an .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed under Section 59. It is in that context, though the contention on behalf of the petitioner was that the Settlement Commission has no jurisdiction that this Court observed that as a bond had been given under Section 59 it was not necessary to examine those contentions. The issue, therefore, of applicability or nonapplicability of Section 28 was not considered by this Court. 16. The next judgment relied upon is in the case of Hi Tech Engineers vs. Union of India & Ors., 2004 (1) Bom. C.R. 776. Again the issue was in the context of interest on warehousing charges. The issue which is under consideration before this Court was not under consideration. Similarly was the judgment of this Court in B.K. Industrial Corporation vs. Union of India 2004 (169) E.L.T. 13 (Bom.). The judgment of this Court in CCE & C. Aurangabad vs. Padmashri V.V. Patil S.S.K. Ltd., 2007 (215) E.L.T. 23 (Bom.) was considering the provisions of the Central Excise Act. The judgment of the Punjab and Haryana High Court in the matter of Falcom Textiles Ltd. vs. Commissioner of Customs, Amritsar 2008 (230) E.L.T. 35 (P. & H.), was also cited. The issue there was in respect of a party aggrieved by the nong .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... er under Section 127F, in our opinion it was open to the Settlement Commission to have directed payment of interest. Ultimately Settlement is of the case . The case involves a demand for duty. Once duty is held to be payable, interest becomes payable by operation of law. Only the question has to be ascertained in terms of the Boards Orders. It is, therefore, a part of the case . In fact interest payable is not what the Customs Officer or the Settlement Commission decides to impose, but interest has to be based upon the orders issued by the Board. Considering, however, the power conferred on the Commission under Section 127H as it then stood it would have been open to the Commission to remit the whole or in part imposition of penalty, fine and interest. It was, therefore, within the jurisdiction of the Commission to have ordered payment of interest at ten per cent, instead of the interest payable in terms of the Board Order, which would be more than 10% 20. Considering the date of passing of the order of settlement, learned Counsel sought to draw our attention to Section 28AB(2) as it now stands. This amendment to subsection (2) as it now stands is substituted by Act 14 of 2001. We .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Site Map - Recent || Site Map ||