The main legal point established in the judgment is that the Settlement Commission's decision was influenced by the admission made by the petitioner in the show-cause-notice, and the court did not address the jurisdictional issue of interpreting the classification of goods under the Customs Tariff Act, 1975.

JUDGMENT :

K.R. Shriram, J.

1. Petitioner – Union of India is impugning an order dated 28.07.2008 passed by the Office of the Settlement Commission, Additional Bench, Customs and Central Excise, Mumbai under section 127C (5) of the Customs Act, 1962 (“the Act”).

2. Mr. Jetly stated that petitioner is challenging the impugned order on two grounds:-

(a) that no show-cause-notice had been issued and therefore respondents could not have filed application before the Settlement Commission under section 138 of the Customs Act, 1962; and

(b) Settlement Commission could not have interpreted classification of the goods under the Customs Tariff Act, 1975.

3. Before we go into the details, as regards the first point, in paragraph 2 of the petition, it is stated the challenge is to the extent that it classifies Motor-home imported by respondent No. 1 under Custom Tariff Heading (CTH) 87.02 as against 87.03 held by the revenue department. The challenge on jurisdiction because no show-cause-notice was issued is not a grievance raised in the petition. In any event, when we consider the documents annexed to the petition, the admitted position was oral show-cause-notice had been issued which was permissible under section 124 of the Act - a notice at the request of person concerned could be oral. After respondent No. 2 approached the Settlement Commission, on the directions of the Settlement Commission, a written show-cause-notice was also issued.

4. The facts in brief are, Respondent No. 2 filed a Bill of Entry bearing No. 848213 dated 27.06.2008 describing importation of one New Burstner, 1821 FIAT DUCATO Chassis No. ZFA25000001354482 12 seater sitting. This vehicle had been imported from one RDH Motor Homes & Caravans Ltd., Nottinghamshire, U.K. According to petitioner, the goods on examination was found to be a Motor-home well equipped with sleeping bed, bathroom, toilet, kitchen, micro-oven, television, refrigerator etc. SIIB(I) Mumbai had taken up the matter for investigation because it found discrepancies in the documents submitted. Though the expression used is ‘discrepancies’, actually the documents submitted did not contain certain mandatory documents. The SIIB(I) also found that the vehicle was not classified properly in as much as respondent No. 1 had declared the vehicle as 12 seater seeking classification under CTH 87.02 whereas SIIB(I) asserted that the vehicle was a motor-home (a special purpose vehicle) to be classified under CTH 87.03. In the midst of the ongoing investigation, respondent No. 2 filed an application on 08.07.2003 before the Settlement Commission, viz., respondent No. 1, claiming that the department had given oral show-cause-notice and written show-cause-notice was waived vide letter dated 04.07.2008. Respondent No. 2 had requested respondent No. 1 for settlement of the following issues:-

(a) Confiscation of the vehicle under section 111 of the Act;

(b) Immunity from fine order under section 125 of the Act;

(c) Duty liable under section 125(2) of the Act;

(d) Immunity from penalty under the Act and ;

(e) Immunity from prosecution under the Act.

Respondent No. 2 also prayed to settle the dispute pertaining to claim for 15% trade discount on the invoice value and non-availability of the Type Approval Certificate.

5. In reply to the application filed by respondent No. 2 with respondent No. 1, petitioner contested the claim of respondent No. 2 and denied that any oral show-cause-notice was issued and also submitted that apart from the claim for 15% trade discount on the invoice value and non-availability of Type Approval Certificate, there was a major issue pertaining to classification which needed to be investigated. The Settlement Commission gave the department seven days time to issue a show-cause-notice.

6. Summons were issued to respondent No. 2 and in the statement recorded, respondent No. 2 maintained that the vehicle was classifiable under CTH 8702 and not 87.03.

7. Respondent No. 1 in its final order dated 28.07.2008, which