Document Fragment View

Matching Fragments

(3) Every application made under Sub-section (1) shall be accompanied by such fees as may be specified by rules.
(4) An application made under Sub-section (1) shall not be allowed to be withdrawn by the applicant,

4. Mr. Rana, the learned Counsel for the Customs Department has contended that the application under Section 127B of the said Act can only be made if the Applicant has filed a Bill of Entry with regard to the import of goods (shipping bill in respect of export) and a show cause notice has been issued to him by the proper officer in relation to such a Bill of Entry. Unless these two essential conditions viz. filing of Bill of Entry as well as issuance of show cause notice are fulfilled, no party can approach the Settlement Commission. Mr. Rana contended that the word "case" has been defined under Section 127A(b). He emphasised that, reading the requirement that there should be a "case", a show cause notice referred to therein, would mean a show cause notice under Section 28 of the Customs Act for short levy where there has been no collusion, wilful misstatement or suppression of facts except regarding misclassification. Mr. Rana contended that only in case of short levy such a show cause notice can be issued and there should be no suppression of facts except regarding the misclassification. To put in other words, Mr. Rana contended that in case of mis-declaration or fraud or any other ground, a party cannot approach the Settlement Commission as the same would not amount to short levy or mis-classification. According to Mr. Rana, in the instant case, the Petitioners had adopted a modus operandi of importing raw material which was not at all used by the petitioners for a long period and the petitioners had wilfully evaded payment of duty and when the investigation was started and the show cause notices were issued, the petitioners had approached the Settlement Commission, which the learned Counsel Mr. Rana states, should not be allowed. Mr. Rana states that the jurisdiction of the Settlement Commission is only with regard to the genuine cases of mis-classification either done wilfully or otherwise. Therefore, the contention of Mr. Rana is that the jurisdiction of the Settlement Commission is confined only to levy, assessment and collection of duty and in the case of mis-classification or otherwise which has resulted in short levy. However, accordingly to Mr. Rana, in case of fraud or mis-declaration or suppression of facts, the remedy of approaching the Settlement Commission under Section 127B is not permissible. In that behalf, Mr. Rana referred to Statement of Objects at the time when the said Chapter XIV-A of the Customs Act was brought in by the amended Act 21 of 1998 which came into force from 1st August 1998. In the said statement of objects annexed to the Bill it is mentioned clearly that the Government has decided to provide Chapter XIV-A in the Customs Act to provide setting up of the Customs and Central Excise Settlement Commissions on the lines of a similar Commission already existing under the Income Tax Act, 1961. In the said Bill it is mentioned that the Settlement Commission will also entertain application for settlement of cases relating to the levy, assessment and collection of customs duty, or any appeal or revision in connection with such levy, assessment or collection. Any importer or exporter or any person who has incurred any liability under any law levying duties of customs may make an application in such form and in such a manner as may be prescribed stating inter alia a true and full disclosure of his duty liability which has not been disclosed before the proper officer having jurisdiction, the manner in which such liability has been incurred and the additional amount of excise duty accepted to be payable by him. It also provides that such an application will be accepted only where the Applicant has filed a bill of entry or shipping bill under the Customs Act, 1962. Only cases where show cause notice or demand notice for recovery of duty has been received by the Applicant will be entertained.

There cannot be a dispute that the powers of the Settlement Commission shall be restricted only to some of those areas enumerated under Chapter XIV-A of the Customs Act and not beyond that. Under Section 127A(b) of the Act, "Case" means any proceeding under this Act or any other Act for the levy, assessment and collection of customs duty. Under Section 127B of the Act, any importer, exporter or any other person may, at any stage of a case relating to him make an application to the Settlement Commission 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 in respect of which he admits short-levy on account of mis-classification or otherwise of goods. In order to avail the benefit of filing of an application under Section 127A of the Act, an importer, exporter or any other person should first establish that the case pleaded before the Commission is in respect of levy, assessment and collection of customs duty, which may on account of mis-classification or otherwise of goods.

9. Thereafter Mr. Rana relied upon the observations of the learned Single Judge in Paragraph No. 13 of the aforesaid judgment, which read as under:

Only after the above fact was detected and found out, the second respondent filed the application before the Commission on the ground that there was some mis-classification of the goods. Further it is seen that the second respondent had imported the goods in the name of M/s. Goutham Enterprises without their knowledge and consent. He did not also disclose the goods in the consignment till the same was found out by the department. From the facts as seen above, I am of the view that it is not the case of mis-classification and it is the case of mis-declaration and the case of smuggling.

19. Mr. Shroff thereafter contended that if one were to look to the provisions of Section 127B, it is explicitly clear that what is mandatory is that there must be a bill of entry or a shipping bill in respect of import or export of goods, and there must be a show cause of notice being issued by the proper officer in relation to such a bill of entry or shipping bill. He has submitted that the party concerned must make full and true disclosure of his duty liability which has not been disclosed before the proper officer, and the manner in which such liability has been incurred and the additional amount of customs duty accepted to be payable by him. Referring to the said provision of Section 127B, Mr. Shroff has further contended that the application must contain 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. Mr, Shroff however contended that till date there are no rules framed under Section 127B, which fact, is not even disputed by Mr. Rana, the learned Counsel for the Department. In fact, such particulars as provided by the wording of Section 127B including particulars of dutiable goods in respect of which the Applicant admits short levy on account of misclassification or otherwise of goods, will have to be provided by specified rules. Mr. Shroff contended that this portion of Section 127B is only a provision to indicate if rules were to be framed. Mr. Shroff contended that this does not in any manner restrict the jurisdiction of the Settlement Commission as sought to be argued by the learned Counsel Mr. Rana. Mr. Shroff contended that there is no dispute that in the instant case a bill of entry was duly filed and the show cause notices were already issued and thereafter the applications were made under Section 127B. Mr. Shroff contended that the arguments of the learned Counsel for the Department that the Settlement Commission has jurisdiction only with regard to short levy arising out of mis-classification of goods and the Settlement Commission will have no jurisdiction in the cases where wilful attempt to evade payment of customs duty or even involving non-levy of duty, is not sustainable. He contends that if such a narrow and restricted meaning is given, the Settlement Commission will lose its utility and nobody will approach the Commission for settling the cases. Mr. Shroff sought to contend that the wording of the aforesaid provision that "the short levy on account of misclassification or otherwise" would clearly mean short levy arising on account of misclassification or otherwise. According to him the words "or otherwise" should be given wider meaning and not a narrow meaning applying the principle of ejusdem generis.