TMI Blog2006 (1) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... third proviso, which seeks to expressly exclude from the purview of the Settlement Commission applications in respect of goods to which Section 123 applies, in the sense, the goods which are notified for the purpose of raising initial presumption on the possessor that the goods are smuggled goods unless the person in possession of the same is in a position to establish the proper import of the goods into the country. While the Settlement Commission itself has described the respondent as a smuggler and thought it fit to levy penalty of Rs. 25,000/-. that act itself should have cautioned the Settlement Commission not to entertain the application in the light of the third proviso to Section 127B of the Act and the Settlement Commission should have rejected the application relegating the respondent to workout his remedy in accordance with the normal course provided under the Act. As I am of the view that the Settlement Commission lacks jurisdiction to entertain the application of the nature filed by the respondent before it, particularly application under Section 127B of the Act, the impugned order cannot be sustained. It is not necessary to go into the merits of the impugned order. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which is the impugned order. For the purpose of invoking the jurisdiction of the Settlement Commission, the respondent as applicant had indicated the goods which were brought as part of his personal baggage to be electronic items and had also indicated the value of the said goods, but had disputed the duty liability on the premise that the respondent should claim the benefit of exemption Notification No. 136/1990, dated 20-3-1990 as amended by Notification No. 28/1998, dated 2-6-1998, on the premise that a person who imports such articles with licence will be entitled for such benefit of duty concession and had claimed as such. 6. The Commissioner of Customs in his report to the Settlement Commission had, inter alia, indicated that the Commissioner of Customs, Bangalore had also accorded sanction for prosecuting the respondent in view of repeated violations of the provisions of the Act and that the respondent had been detained for a year or so under the provisions of COFEPOSA and it was not a fit case for settlement etc. 7. The Settlement Commission examined such aspects and as it found that there was no representation on behalf of the Commissioner before the Settlement Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-levy due to misdeclaration and therefore the Settlement Commission could not have entertained the application for settlement. 11. Shri R. Veerendra Sharma, learned Additional Standing Counsel for Central Government, appearing on behalf of the petitioner, submits that the impugned order of the Settlement Commission is liable to be quashed for the sole reason that the Commission lacks jurisdiction to entertain the application of this nature; that the act of the respondent in not only misdeclaring the goods but also trying to smuggle the goods meant for commercial disposal as personal baggage clearly amounted to a deliberate misdeclaration, both with regard to goods as well as with regard to the nature of the goods and more so with regard to the value, which the respondent had declared at about Rs. 35,000/- as against the value, as suggested in the show cause notice being Rs. 18,38,300/-, which in fact had come to be accepted by the very respondent before the Settlement Commission and when such is the nature of infraction, provisions of Sections 127B and 127C are not attracted; that it is not a case covered by Chapter XIV of the Act and therefore the order deserves to be quashed. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that stage could not have been entertained by the Settlement Commission in the light of the law laid down by the Madras High Court in the case relied upon and cited supra. 14. Another submission is that the Settlement Commission can entertain an application only in a situation of misclassification and not misdeclaration and that the words 'misclassification or otherwise of goods' are used in Section 127B of the Act, which reads thus : 127B. Application for settlement of cases . - (1) Any importer, exporter or any other person (hereinafter referred to as the application in this chapter) may, at any stage of a case relating to him make an application 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 or otherwise of goods, to the Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act indicates that the protection or immunity that is given only in respect of levy of penalty and prosecution and not in respect of duty liability. In fact for the purpose of determination of duty liability, the Settlement Commission itself acts as an adjudicating authority and can determine the duty liability and the applicant is also liable to pay such duty liability within 30 days from the date of receipt of a copy of the order and the Commission is given power to extent time subject to payment of interest by the applicant beyond the initial period of 30 days. The Settlement Commission also has power to levy penalty or interest in respect of the amount quantified as liable to be paid as duty by the applicant. The provisions of Section 127C also indicate that the order indicating settlement brought about by the commission will become void if it is subsequently found that such orders had been obtained by fraud or mis representation of facts by the applicant. 19. The scheme indicates that while the Settlement Commission has power to grant immunity from levy of penalty and prosecution, the duty liability has to be enforced. The Commission may also levy not only interest but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a misdeclaration and not a case of misclassification, the very provisions of Section 127B are not attracted and the Settlement Commission could not have entertained the application. One another affirming provision is the third proviso, which seeks to expressly exclude from the purview of the Settlement Commission applications in respect of goods to which Section 123 applies, in the sense, the goods which are notified for the purpose of raising initial presumption on the possessor that the goods are smuggled goods unless the person in possession of the same is in a position to establish the proper import of the goods into the country. While the Settlement Commission itself has described the respondent as a smuggler and thought it fit to levy penalty of Rs. 25,000/-. that act itself should have cautioned the Settlement Commission not to entertain the application in the light of the third proviso to Section 127B of the Act and the Settlement Commission should have rejected the application relegating the respondent to workout his remedy in accordance with the normal course provided under the Act. 22. As I am of the view that the Settlement Commission lacks jurisdiction to entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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