The main legal point established in the judgment is that collusion between the petitioner and the importer can affect the maintainability of the application before the Settlement Commission.

ORDER :

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, for the issuance of Writ of Certiorari, calling for the records of the Respondents in and connected with Final Order No.39/2008-Cus dated 12.12.2008 passed in S.A.(C)No.31/2008 of the 1st Respondent, The Customs, Excise Settlement Commission Additional Bench, Chennai, quash the same.)

1. This batch of writ petitions can be divided into two sets (i) W.P.Nos.1004, 1821, 1535 and 3055 of 2009 and (ii) W.P.Nos.3053 and 3054 of 2009. A common order is passed in both sets of matters since the material factual as well as legal position in all writ petitions is more or less similar.

2. Heard the submissions of Mr.B.Satish Sundar, learned counsel for the petitioners, Mr.T.Pramod Kumar Chopda, learned Senior Standing Counsel for the respondents in WP.Nos.1821, 1004, 1535 of 2009 and Mr.Rajasekar, learned counsel for the respondents in WP.Nos.3053 to 3055 of 2009.

3. The facts that arise for determination in W.P.No.1004 of 2009 are taken to be representative of the facts and legal questions that arise in the four writ petitions constituting the first set of matters.

4. The petitioners challenge orders of the Settlement Commission dated 10.12.2008 (W.P.Nos.1535, 3053 and 3054 of 2009) and 12.12.2008 (W.P.Nos.1004, 1821 and 3055 of 2009) rejecting the applications filed by them in terms of Section 127(C)(5) of the Customs Act, 1962 (in short ‘Act’).

5. The petitioner had purchased a used Toyota Prado vehicle (in short ‘vehicle’). The facts leading to the import of this vehicle are that, one, Kottayil Ahmmed had imported the vehicle bearing Chassis number KZ J 95 0151130 under a Bill of Entry bearing No.121795 dated 07.01.2003 under the Transfer of Residence Rules. The assessable value was declared at a sum of Rs.3,32,284.95 and upon payment of duty of Rs.6,03,730/-, the vehicle was cleared.

6. Subsequent investigation appeared to reveal that the Chassis number had been temporary, the actual Chassis number being KZ J 95-0091013. The date of manufacture was 04.03.1998. The assessable value as well as the duty were re-worked on the basis of the investigation at a sum of Rs.5,25,130/- and Rs.9,54,113/- respectively. The duty had thus been short-paid to an extent of Rs.3,50,383/-. The investigation conducted revealed that the petitioner was in possession of the vehicle and that the vehicle had been purchased by the petitioner under a lease agreement entered into with the importer with the assistance of an intermediary. Since this sequence of events was in contravention of Public Notice bearing No.3 dated 31.03.2000, the vehicle was seized on 22.11.2006 and provisionally released on 23.11.2006 upon the deficit duty being remitted. A bank guarantee for a sum of Rs.3,87,500/- and an indemnity bond had been furnished along with the remittance of provisional duty.

7. Upon conclusion of investigation, the Director of Revenue Intelligence at Mumbai issued show cause notices to the petitioner, the importer and others connected with the transaction of import and sale of the vehicle, in terms of Sections 128 and 28(1) of the Act on 04.01.2008. As far as the petitioner is concerned, the relevant portion of the show cause notice reads as follows:

‘(E) Shri Krishna Ashtekar, the possessor of the said vehicle has also contravened the provisions of Public Notice No.3 dated 31st March, 2000 inasmuch as he had purchased the subject Toyota Prado vehicle in the guise of lease agreement. He had by his such acts as discussed at Para 13(F) supra rendered the subject vehicle liable to confiscation under Section 111(o) of the Customs Act, 1962. As per the provisions of Section 125(2) of the Customs Act, 1962. “Where any fine in lieu of confiscation of goods in imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods”. In the case of Commissioner of Customs (Import),