2007 (12) TMI 373 - Commission - Customs

Summary

Issues Involved:
1. Admission of Settlement Applications
2. Compliance with Duty Liability
3. Maintainability of Applications
4. Release of Seized Goods
5. Rejection of Co-Applicant's Application

Summary:

1. Admission of Settlement Applications:
The applications for settlement were filed by the applicant and co-applicants u/s 127B of the Customs Act, 1962, following the issuance of a Show Cause Notice dated 17-10-2003. The Settlement Commission initially rejected the applications on 16-8-2004, but the Hon'ble Bombay High Court remanded the matter back to the Commission for reconsideration. The Commission, on 9-11-2005, allowed the applications to proceed u/s 127C(1), directing the applicant to deposit the admitted duty liability and execute a bond with a bank guarantee.

2. Compliance with Duty Liability:
The applicant was directed to deposit the admitted duty liability of Rs. 83,11,742/- and execute a bond with a bank guarantee of Rs. 25,00,000/-. Despite the applicant's compliance, the Revenue did not deposit the cheques, seeking legal opinion due to a pending SLP in the Supreme Court. The Commission held that the applicant had made the payment within the prescribed time limit and directed the applicant to revalidate the cheques or make the payment by other means.

3. Maintainability of Applications:
The Hon'ble Bombay High Court, in its order dated 20-12-2006, quashed the Commission's order dated 9-11-2005 and remitted the matter back for fresh consideration. The Court held that the application was maintainable despite the absence of a bill of entry, as previously ruled in Writ Petition No. 2430 of 2004. The Commission, bound by the High Court's order, proceeded with the admission of the application.

4. Release of Seized Goods:
The Commission allowed the provisional release of the seized goods, subject to the payment of full duties and a cash security deposit of Rs. 1 crore. This decision was in line with the applicant's compliance with the duty liability and the absence of any stay from the Supreme Court on the High Court's order.

5. Rejection of Co-Applicant's Application:
The application filed by M/s. I.P. Patel & Co. was rejected as it did not fulfill the criteria laid down u/s 127B of the Act. The co-applicant had not admitted any duty liability on the seized diamonds, leading to the rejection of their application u/s 127C(1).

Conclusion:
The Settlement Commission admitted the applications of the applicant and certain co-applicants, subject to compliance with the duty liability. The application of M/s. I.P. Patel & Co. was rejected for non-admission of duty liability. The Commission's decisions were guided by the High Court's directives and the legal provisions of the Customs Act, 1962.