TMI Blog2004 (8) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... s were illegally disposed of instead of using the same as input materials for exportable products. It is the pre-condition for use of the advance licence that corresponding export obligation has to be fulfilled. As such show cause notice was issued under Section 124 of the Customs Act, 1962. After issuance of the show cause notice, the importers concerned filed an application under Section 127B of the Customs Act, 1962, for settlement of the case, before the Customs and Central Excise Settlement Commission, being the respondent No. 1. The aforesaid application was heard in two stages. At the admission stage, the respondent took a plea that having regard to the facts and circumstances of this case, the respondent No. 1 ought not to have entertained the application under Section 127B as the conditions mentioned therein have not been fulfilled. By an order with detailed reasons, the respondent No. 1 rejected the plea of jurisdiction and found that importers have fulfilled all the conditions to maintain the application and, therefore, decided to hear the application on merit, at subsequent stage. 3.It is pertinent to mention that the said order dated 20th March, 2003, passed while ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as interest is concerned, the Commission has asked the importers to pay interest at the rate of 10 per cent from the date of import of duty- free input, till the payment of duty on such goods, on pro rata basis which was permitted by the Revenue including the diverted quantity, subject to complete waiver of interest beyond 11th December, 2002. 7.Learned Additional Solicitor General, Mr. Kapoor, while assailing the impugned order submits that the conditions mentioned in Section 127B has not been fulfilled, as there was no mention of un-disclosed duty liability. The application was not based on the admitted and disclosed duty liability, as will appear from the several Bill of Entries and accompanying Bonds. He submits that respondent No. 1, while entertaining application without having conditions fulfiled has acted in excess of jurisdiction. It is submitted by him that though order admitting the application and payment pursuant thereto having been made and accepted, but this do not preclude the petitioner from challenging the question of jurisdiction or authority of the respondent No. 1 to settle the case, he has drawn my attention to copies of several Bill of entries and the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court may examine the final order, if permissible under law. 11.Mr. Pal contends that the petitioners filed five several Bill of Entries, disclosing duty liability as being "nil" as at that point of time, the petitioner has been enjoying exemption as condition of advance licenses. However, after issuance of show cause notice, the importer found that since its obligation of export of the material could not be discharged on various circumstances, they sold these imported materials in indigenous market and disclosed truly and fully duty liability in order to settle the matter, after issuance of show cause notice, the importer/respondent filed the instant case. The importer's duty liability could be discovered and disclosed later on, when it was found that the petitioner could not fulfil export obligation. Therefore, at the time of filing of Bill of Entries, the duty liability of the petitioner was 'nil'. He submits that the definition of assessment will be found in sub-section (2) of Section 2 of the said Act and when the duty liability arises, will appear from Section 12 and Section 17. According to him, 'nil duty' is also a duty liability. Therefore, it cannot be construed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orter has co-operated having made full disclosure of un-paid duty and in fact in terms of the interim order of the Commission, discharged its duty liability making full payment. This co-operative conduct of the importer respondent has been taken into consideration by the Commission. The department has accepted this payment. Under those circumstances this Court will dismiss the writ petition. In support of his submission he has relied on the following decisions : 1988 (33) E.L.T. 354, 1988 (36) E.L.T. 289, 1983 (14) E.L.T. 1688, 1981 E.L.T. 533 (sic), 1993 (68) E.L.T. 9 (S.C.) = AIR 1994 SC 88, 2001 ITR 611. 14.Therefore, the writ petition filed by his client should be allowed asking the Department concerned to release the Bank Guarantee and bond both dated 20th May, 2003. 15.I have heard and examined carefully the contention and rival contention of the parties advanced through their learned Counsels. The following three points are involved to decide both the matters : (1) Whether the Settlement Commission had or has jurisdiction to exercise its power under Chapter XIV(A) of the Customs Act, 1962 to entertain the application of the respondent/importer on the given fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exercise jurisdiction having authority, illegal and improper exercise of power. In this case while appreciating the case I think it is nobody's case of inherent lack of power or jurisdiction of the Commission. It is at the most lack of authority to exercise power having regard to the subject matter of the application. In the first type of case the authority concerned could not receive the application at all. In this case going by the statement in the application made out by the importer, the Commission has rightly entertained the application, since it has considered in great details, whether the conditions mentioned in Section 127B of the said Act has been fulfilled or not. I accept the argument of Mr. Kapoor (the learned Additional Solicitor General) that the Commission will have lawful jurisdiction to exercise its power under the aforesaid Chapter, if an application discloses full and true duty liability which has not been disclosed before the appropriate officer, the manner in which such liability has been incurred, the additional amount of duty of customs accepted to be payable by him on any ground whatsoever. The Commission found that the importer respondent fulfilled all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also (either wholly or in part) from the imposition of any penalty under this Act, with respect to the case covered by the settlement : Provided that no such immunity shall be granted by the Settlement Commission in case where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under Section 245C." 19.I find considerable strength in the submission of Mr. Pal that the decisions cited in this context by Mr. Kapoor are not at all relevant in this case, for the corresponding provision of Section 127H of the Customs Act is not an absolute paramateria. From the Section as above it is clear that the Commission has been empowered by the Legislature amongst others to waive interest under this Act. So it is appropriate to set out Section 127H(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot under the provision of the Act, but under the bond at the rate of 24 per cent in terms of exemption notification. I am of the view though Bond furnished in terms of statutory decision, but then contractual character is not destroyed. I am unable to comprehend how the learned Commission could overlook the implication of bond in relation to payment of interest thereunder. It seems to me it has wrongly equated payability of interest under the bond with the expressed provision of the said Act. Unlike Civil Court the waiver either of full or of partial interest in contractual bargain cannot be granted by the Commission without consent of both the parties. To clarify the position had it been a case of chargeability or payability of interest under expressed provision of the Act the Commission would have jurisdiction. This point once was brought for decision before Bombay High Court in the case of Pratibha Syntex Ltd. v. Union of India [2003 (157) E.L.T. 141]. Their Lordships of the Division Bench however did not deal with the same as the facts and situation of the case did not warrant. In Paragraph 16 it was observed by their Lordships as follows : "..............although the Settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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