2003 (10) TMI 454 - Commission - Central Excise

Settlement Commission - Jurisdiction - Case - Meaning and scope - Smuggling - Precedent - Judicial discipline

Issues Involved:
1. Jurisdiction of the Settlement Commission to entertain the application.
2. Legitimacy of the smuggled goods.
3. Interpretation of the Bill of Entry requirements under Section 127B(1) of the Customs Act, 1962.
4. Applicability of the Madras High Court judgment in similar cases.
5. Refund of the amount deposited with the Revenue.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Settlement Commission to entertain the application:

The primary issue was whether the Settlement Commission had the jurisdiction to entertain the application filed by the applicant, M/s. Sai Impex, under Section 127B of the Customs Act, 1962. The Commission examined the facts of the case, where ball bearings were concealed in consignments declared as Damar Batu. The Revenue argued that the application did not meet the entry criteria of Section 127B(1) because the Bill of Entry did not declare the ball bearings, thus disqualifying the application for settlement. The Commission referred to the Madras High Court judgment in Commissioner of Customs (AIR) Chennai v. Customs & Central Excise Settlement Commission, where it was held that undeclared goods in a Bill of Entry could be considered smuggled, and such cases do not fall under the definition of "case" for settlement purposes.

2. Legitimacy of the smuggled goods:

The Revenue contended that the applicant was attempting to legitimize smuggled goods by filing the application for settlement. The Commission noted that the applicant had admitted to concealing ball bearings in the consignments of Damar Batu. The Commission found that the facts were similar to the Madras High Court case, where undeclared goods in the Bill of Entry were considered smuggled, and thus, the application for settlement could not be entertained.

3. Interpretation of the Bill of Entry requirements under Section 127B(1) of the Customs Act, 1962:

The Commission examined the requirement under Section 127B(1) that the applicant must have filed a Bill of Entry in respect of the import of goods. The Revenue argued that the Bill of Entry must include all goods imported, and since the ball bearings were not declared, the application did not satisfy this requirement. The applicant argued that the Bill of Entry was filed correctly for the declared goods and that the proceedings related to a "case" as defined in Section 127A(b) of the Act. The Commission, however, found that the non-declaration of ball bearings in the Bill of Entry disqualified the application for settlement.

4. Applicability of the Madras High Court judgment in similar cases:

The Commission relied on the Madras High Court judgment, which held that undeclared goods in a Bill of Entry were considered smuggled and did not qualify for settlement under Section 127B. The Commission found that the facts of the present case were identical to those in the Madras High Court case, and thus, the application could not be allowed to proceed.

5. Refund of the amount deposited with the Revenue:

The Commission directed the Revenue to refund the amount deposited by the applicant in pursuance of the earlier admission order and to communicate their no objection for the return of the amount deposited in the High Court, subject to their orders.

Separate Judgment by A.K. Mehta, Vice Chairman:

Vice Chairman A.K. Mehta dissented from the majority view, arguing that the import of ball bearings was not prohibited and that the goods would eventually be released on payment of fine, leading to the levy, assessment, and collection of customs duty. He opined that the case fell within the definition of "case" under Section 127A(b) and that the words "or otherwise" in Section 127B covered situations where goods were not declared or misdeclared in the Bill of Entry. He concluded that the Commission had jurisdiction to settle the case and that the application met the parameters laid down under Section 127B.

Final Order:

The majority order concluded that the Commission did not have jurisdiction to entertain the application and rejected it. The minority view held that the Commission had jurisdiction, but it did not prevail.

← Previous Next →