2013 (8) TMI 317 - HC - Customs

Jurisdiction on the Settlement Commission - Confiscation of Goods Interest and Penalty the applicant moved the Settlement Commission under Section 127(1) Held that - Provisions relating to baggage fall under Chapter 11 of the Customs Act, the provisions relating to confiscation - which were invoked in the present case were general in nature and apply to all classes of imports - made either where goods are sought to be cleared under Chapter 7 or under Chapter 6 as in the present case. This observation of the Court is strengthened by the fact that Section 127(B) itself enumerates the kinds of cases which cannot be entertained by the Commission, for instance listed in third proviso of Section 127(B)(i) - Having regard to these and the observations of the Madras High Court in Commissioner of Customs v. Customs & Excise Settlement Commission 2007 (10) TMI 83 - HIGH COURT MADRAS - the argument of the Revenue on this aspect lacks in merit. In the absence of filing of bill of entry, the application filed was not maintainable was wholly misconceived Held that - The application filed was maintainable it was not open to the revenue to contend that the Settlement Commission was in error in entertaining the application the Commission noticed that baggage is a specific item under Chapter heading 98.03 of the Customs Tariff Act, 1985 - It rested its conclusion on the fact that the duty computed by the Revenue in the show cause notice itself was 35% ad valorem which related to baggage - Idris Y. Porbunderwala 2005 (6) TMI 302 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE, . On a careful reading of Sections 127(A) and 127(B) the Revenue s contention that since the applicant had not filed bill of entry or that the case was one relating to baggage and therefore did not involve short levy or non-levy was without force - The provisions that confer jurisdiction on the Settlement Commission cannot be construed as narrowly as it sought to be urged by the Revenue - If parliamentary intention was to exclude adjudication by Customs Authorities in respect of baggage claim, from the purview of the Commission s jurisdiction, surely such intention would have been more clearly manifested like in the case of 3 proviso of Section 127(B)(i) petition allowed Decided in favor of assesse.

Summary

Issues Involved:
1. Jurisdiction of the Settlement Commission under Section 127 of the Customs Act.
2. Applicability of Section 77 and Chapter 11 provisions related to baggage.
3. Validity of the show cause notice under Section 124 versus Section 28.
4. Requirement of filing a bill of entry for baggage cases.

Detailed Analysis:

Jurisdiction of the Settlement Commission under Section 127 of the Customs Act:
The primary issue was whether the Settlement Commission had jurisdiction under Section 127 of the Customs Act to entertain the application filed by the applicant. The Customs Department argued that the Commission lacked jurisdiction as the applicant did not file a bill of entry or shipping bill under Section 127(C), and the case did not involve short levy due to mis-declaration or undervaluation. The Commission, however, rejected these objections, stating that the show cause notice invoked demands for additional duty and re-determination of the value of goods, thus bringing the case within its jurisdiction under Section 127(C)(5). The Court upheld this view, emphasizing that the provisions of Sections 127(A) and 127(B) are broad enough to cover cases involving baggage and that there is no express or implied bar against entertaining such applications.

Applicability of Section 77 and Chapter 11 provisions related to baggage:
The Customs Department contended that the applicant's case fell under "baggage" as per Section 77, which required a declaration of contents by the owner. The Commission noted that the applicant had declared the value of the goods as baggage and was not required to file a bill of entry. The Court agreed with the Commission, stating that the importation of goods as baggage is a recognized mode and does not necessitate a bill of entry. The Commission's broad interpretation of its jurisdiction under Sections 127(A) and 127(B) was upheld, allowing it to entertain applications involving baggage.

Validity of the show cause notice under Section 124 versus Section 28:
The Customs Department argued that the show cause notice under Section 124, which deals with confiscation, is different from a notice under Section 28, which deals with the recovery of duty not levied or short-levied. The Commission and the Court found that the show cause notice in question invoked both demands for additional duty and re-determination of the value of goods, thus making it a case of short-levy due to undervaluation. The Court referred to the Madras High Court's ruling in V.C. Mohan v. Commissioner of Customs, which supported the view that such cases fall within the purview of Section 127(B).

Requirement of filing a bill of entry for baggage cases:
The Customs Department insisted that the applicant's failure to file a bill of entry disqualified the case from being entertained by the Settlement Commission. The Commission and the Court rejected this argument, noting that the applicant, as a passenger, was required to fill in a disembarkation card rather than a bill of entry. The Court emphasized that the procedural requirement of filing a bill of entry is not applicable to baggage cases, and the Settlement Commission's jurisdiction extends to such cases.

Conclusion:
The Court dismissed the Revenue's writ petition (WP (C) No. 10449/2009), affirming the Settlement Commission's jurisdiction and its order. The Court allowed the applicant's writ petition (WP (C) No. 6746/2012) for the release of the seized watches, directing the applicant or its representative to be present before the concerned Customs authority for the release of the goods. The judgment clarified that the Settlement Commission's jurisdiction under Sections 127(A) and 127(B) of the Customs Act is broad and inclusive of cases involving baggage, provided the procedural requirements are met.