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IN THE HIGH COURT OF DELHI
D.N. Patel, C. Hari Shankar, JJ.
Pr. Addl. Director Gen., Directorate of Revenue Intelligence - Appellant
Versus
Customs, Central, Excise & Service Tax Settlement C - Respondent
W.P.(C) 4143 of 2018
Decided On : 10-02-2020
A Settlement Commission lacks jurisdiction to entertain settlement applications for goods notified under Section 123 of the Customs Act, 1962 at the time of the application.
Headnote:(A) Customs Act, 1962 - Section 127B and Section 123 - Writ petition challenging the Settlement Commission's order for maintaining applications under Section 127B regarding seized goods notified under Section 123. The court found that applications filed post-notification of cigarettes under Section 123 were not maintainable. (Paras 1, 5, 6)
Facts of the case:
The proceedings arose from a show cause notice issued by the Directorate of Revenue Intelligence concerning the seizure of imported cigarettes and aluminium scrap not under legitimate import documentation. Following the issuance of show cause notices, respondents sought to settle the case with the Settlement Commission. (Paras 2(v), 2(xi))
Findings of Court:
The Settlement Commission acted beyond its jurisdiction by entertaining applications for settlement of seized goods notified under Section 123 of the Customs Act, as the statutory requirement was not met. (Paras 5, 6)
Issues: The main issue was whether the Settlement Commission had jurisdiction to entertain applications concerning goods notified under Section 123 of the Customs Act at the time of application. (Paras 5(f), 6)
Ratio Decidendi: The court emphasized that the maintainability of settlement applications is contingent upon the status of goods under Section 123 at the time of the application, not upon the time of import. (Paras 5(e), 6)
Result: The order dated 15th February 2018 by the Settlement Commission was quashed and set aside.
| Table of Content |
|---|
| 1. challenge to settlement commission's order (Para 1 , 2) |
| 2. maintainability of writ petition & settlement applications (Para 3 , 4) |
| 3. jurisdiction over notified goods under section 123 (Para 5 , 6) |
| 4. final order disposing of the writ petition (Para 7 , 8) |
JUDGMENT
D.N. Patel, Chief Justice (Oral)--This writ petition has been preferred challenging the order passed by Settlement Commission dated 15th February, 2018 (Annexure P-1 to the memo of this writ petition). The impugned order has been passed by the Settlement Commission under Section 127C of the CUSTOMS ACT , 1962.
2. FACTUAL MATRIX:
(i) These proceedings emanate from show cause notice dated 7th April, 2017, issued by the Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), New Delhi, to respondent Nos.2 to 11 herein.
(ii) Given the limited scope of controversy in the present writ petition, it is not necessary to enter into detail in the facts of the case, suffice it is to state at about 9:15 p.m. on 09.04.2016, Officers of the DRI intercepted an Innova vehicle, one Ford Figo car and a truck, which arrived at a godown located in Darshan Vihar, Burari, Delhi, and on searching the said vehicles, 300 cartons of cigarettes, with 60 boxes in each carton were found concealed behind Aluminium scrap. The goods were found to be of Indonesian origin. The persons in the aforesaid vehicles were unable to produce any document/evidence of licit import of the aforesaid cigarettes. Under the reasonable pleas that the cigarettes have been smuggled to India, they were seized. Subsequently, another container, at ICD Ludhiana, imported by respondent No.2, was also seized, in which imported cigarettes were found concealed.
(iii) Mr. Neeraj Aggarwal, Mr. Tarun Aggarwal, Mr. Sanjiv Aggarwal, Mr.Murarilal Girdharilal Sharma and Mr. Sanjay Lal Choudhary and Mr.Bhushan Bansal who were involved in the aforesaid imports filed W.P. No.12517/2016 before the High Court of Punjab & Haryana seeking provisional of release of cigarettes imported with Bills of Entry Nos. (i) 4785466 dated 04.04.2016, (ii) 4308262 dated 19.02.2016 and (iii) 4410560 dated 27.02.20216 which had been seized at Ludhiana and Delhi. They also requested that directions be issued, to the DRI, to issue show cause notice, so that they could approach the Settlement Commission and have the case settled.
(iv) The High Court of Punjab and Haryana disposed of the aforesaid writ petition with directions inter alia to the DRI, to issue a show cause notice in respect of the aforesaid three Bills of Entry under Section 28 read with Section 123 of the CUSTOMS ACT , 1962 (hereinafter referred to as "the Act") within four weeks, and to the petitioners, before the High court to move the Settlement Commission within four weeks of the date of issuance of the show cause notice. The Settlement Commission was given liberty to decide all issues in respect of the aforesaid three Bills of Entry.
(v) Subsequently, that the order dated 26.08.2016 passed on an application moved by DRI, time of issuance of show cause notice was extended, by the High court, by four weeks.
(vi) Ultimately, show cause notices, were issued, proposing confiscation of the cigarettes imported with the aforesaid three Bills of Entry Nos. (i) 4785466 dated 04.04.2016, (ii) 4308262 dated 19.02.2016 and (iii) 4410560 dated 27.02.20216 as well as confirmation and demand of duty of Customs Duty of Rs.6,74,92,998/- in respect of the cigarettes and Rs.2,77,451/- in respect of the Aluminium scrap imported with the said Bills of Entry. The show cause notices also proposed appropriation towards the said demand of Rs.6,30,84,822/- deposited during the investigation. Respondent Nos.2 to 11 were also directed to show cause against imposition of penalty.
(vii) Respondent Nos.2 to 11 approached the Settlement Commission after depositing Rs.6,63,66,048/- against demand of Rs.6,77,70,449/proposed in the show cause notice. Liability, to interest of Rs.4,76
