The main legal point established in the judgment is that the Settlement Commission did not have jurisdiction to entertain the application in relation to gold due to the clear bar provided in the third proviso to Section 127B(1) read with Section 123 of the Customs Act.

S. RAVINDRA BHAT, J.

1. The Customs Authorities have filed these proceedings questioning the decision of the Settlement Commission made upon an application filed by the respondent. It is contended that the Settlement Commission could not have, by virtue of third proviso to Section 127B [read with Section 123(2)] of the Customs Act, lawfully entertained the application and proceeded to pass orders settling the issues urged.

2. The respondent, who is a former United Nations official, arrived at IGI Airport, Delhi, on 04.05.2014; carrying 6 gold bars weighing 1832.4 gms, valued at Rs. 45,45,222/-. She did not declare the gold either at the stage of clearing the customs area or disclose the information in the disembarkation slip. Upon search, the gold was detected and seized from her person. The show cause notice was issued on 22.10.2014. On 13.01.2015, the respondent moved the Settlement application which was finally disposed of and the matter settled by recording a final settlement order on 05.06.2015.

3. The Union of India through the Customs Department urges that Section 123(1) which provides for shifting the burden of proof where the goods are seized in the reasonable belief that they have been smuggled, would apply to gold, watches and any other class of goods which the Central Government notifies. It is urged that this is apparent by virtue of Section 123(2), and the third proviso of Section 123B operates as a clear bar to the Settlement Commission’s jurisdiction. Learned counsel for the petitioner/Customs authorities relies upon the decision of the Division Bench of this court in Additional Commissioner of Customs vs. Ram Niwas Verma, 2015 (323) ELT 424 (Del), especially the following extract:

“7. On a plain reading of the third proviso to Section 127B(1) of the said Act, it is evident that no application for settlement can be made if it relates to goods to which Section 123 applies. Section 123 sub-section (2) specifically provides that the said Section applies to, inter alia, gold. It is, therefore, clear that when the two provisions are read together, no application under Section 127B(1) can be made in relation to gold. This case clearly pertains to gold. The respondent made an application, nevertheless, to the Settlement Commission which has entertained the same and has also rejected the plea raised by the Revenue that it did not have jurisdiction to entertain such an application. We agree with the submission made by the learned counsel for the Revenue that the Settlement Commission did not have the jurisdiction to entertain such an application as there was a complete bar provided in the third proviso to Section 127B(1) read with Section 123 of the said Act.

8. The learned counsel for the respondent sought to draw some support from a decision of this Court in the case of Commissioner of Customs v. Ashok Kumar Jain: 2013 (292) ELT 32 (Del) as also a subsequent decision of another Division Bench of this Court in Komal Jain v. Union of India and Another: 2014 (304) ELT 675 (Del). In Ashok Kumar Jain (supra), the issue of Section 123 has not been considered at all. Insofar as the decision in Komal Jain (supra) is concerned, the Division Bench itself, in paragraph 21, observed that the issue with regard to the applicability of Section 123 of the Act by way of the third proviso to Section 127B was left open and it was for the Settlement Commission to examine the same, if such a point was raised, in accordance with law. In the present case, we find that the point with regard to the third proviso to Section 127B(1) read with Section 123 of the said Act had been specifically raised by the Revenue and the same has been considered by the Settlement Commission and has been rejected. We have already indicated above that the rejection by the Settlement Commission is not in accordance with law. A plain reading of the provisions clearly indicates that an application under Section 127B cannot be made in respect of, inter alia, gold,