2001 (11) TMI 357 - Commission - Customs

Summary

Issues Involved:
1. Admission of application under Section 127B of the Customs Act, 1962.
2. Jurisdictional issues between benches.
3. Full and true disclosure of duty liability.
4. Interpretation of Section 127B(1) and (2) of the Customs Act, 1962.
5. Compliance with principles of natural justice.
6. Appropriation of deposited amount towards duty liability.

Detailed Analysis:

1. Admission of application under Section 127B of the Customs Act, 1962:
The judgment addresses the admission of an application filed by M/s. Chawla Enterprises Ltd. under Section 127B of the Customs Act, 1962, for the settlement of their case. The applicant had accepted an additional duty liability of Rs. 48,52,382.01 due to under-invoicing of import consignments. The Directorate of Revenue Intelligence (DRI) reported that the values declared at the time of export from Hong Kong were higher than those shown in the invoices submitted to Indian Customs, leading to an additional duty liability of approximately Rs. 1.14 crores.

2. Jurisdictional issues between benches:
The application was initially registered at the Additional Bench in Mumbai and later at the Principal Bench in New Delhi. The matter was referred to the Chairman of the Commission for assignment to a single bench due to jurisdictional overlap. The Principal Bench at New Delhi was assigned for disposal. The respondent had no objection to the application being admitted concerning imports through Mumbai but objected to the Additional Bench at Mumbai dealing with imports through Delhi due to jurisdictional issues.

3. Full and true disclosure of duty liability:
The DRI contended that the applicant's disclosure of Rs. 48,52,382.01 was not full and true, as their investigation revealed an evasion of customs duty amounting to Rs. 1.14 crores for 36 consignments. The applicant argued that they had made a full and true disclosure based on the material available to them and had voluntarily deposited Rs. 1 crore towards probable duty liability.

4. Interpretation of Section 127B(1) and (2) of the Customs Act, 1962:
The Commission deliberated on whether sub-section (2) of Section 127B was independent of sub-section (1) and whether the provisions of sub-section (1) could be read into sub-section (2). The applicant's advocate argued that sub-section (2) is an exception to sub-section (1), allowing the Commission to entertain an application even when investigations are incomplete and a show cause notice (SCN) has not been issued. The Revenue contended that sub-section (2) should be read in conjunction with sub-section (1), emphasizing the necessity of full and true disclosure.

5. Compliance with principles of natural justice:
The applicant's advocate argued that the necessity to issue a SCN is to comply with the principles of natural justice, which are inherently complied with when the applicant voluntarily approaches the Commission and makes a full and true disclosure. The Commission noted that the procedure under Section 127C(1) allows the Commissioner of Customs to submit a report detailing all allegations and materials, ensuring compliance with natural justice principles.

6. Appropriation of deposited amount towards duty liability:
The Commission directed the Revenue to appropriate Rs. 48,52,382.01 towards the duty accepted in the case from the deposited amount of Rs. 1 crore and report compliance within 30 days. The Commission also clarified that the Revenue is free to continue investigating the case and issue a SCN if necessary during the pendency of the application.

Conclusion:
The Commission admitted the application under Section 127C(1) of the Customs Act, 1962, allowing it to proceed. The Commission emphasized that sub-section (2) of Section 127B is an exception for cases involving search and seizure, providing a sufficient time of 180 days for the Department to complete its investigation. The Commission found that the applicant had made a proper and adequate disclosure, satisfying the requirements of Section 127B of the Act. The Revenue's reliance on a previous decision in the case of Modi Alkalies & Chemicals Ltd. was deemed inapplicable due to different facts and circumstances. The judgment underscores the importance of interpreting the Act as a whole and ensuring that legislative intent is not rendered redundant.