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2015 (11) TMI 142 - HC - CustomsSettlement of case - before submitting reply to the show cause notice, approached the Settlement Commission - Application to Section 127B of Customs Act - Maintainability of appeal - Held that - Bills of Entry appended to the show cause notice issued to the petitioners would indicate that these are notified goods under Section 123 of the Act. It is because of this precise reason, Settlement Commission having taken note of the fact that goods in question would fall within the definition of goods as notified under Section 123 of the Act, has held that the 3rd proviso to sub-sec.(1) of Section 127B is attracted or in other words, same would come into play and as such, held that application is not maintainable. In that view of the matter, we are of the considered view that the application filed by the writ petitioners seeking for settlement of dispute before the Settlement Commission by invoking Section 127B of the Act, was not required to be entertained by the Settlement Commission and as long as the ingredients of Section 123 are attracted and application of the petitioner would squarely fall within 3rd proviso of Section 127B of the Act. Petitioners are yet to reply to the show cause notice. The dismissal of the application filed before the Settlement Commission as affirmed by the learned Single Judge which has been confirmed by us, would not prevent the writ petitioners to file reply to the said show cause notice and during the course of the adjudication proceedings, if the petitioners are able to establish that goods in question do not fall under the notification No.204-CUS dated 20.07.1984, it would be open to them to approach the Settlement Commission under Section 127B of the Act. In such an event, Settlement Commission shall adjudicate the application without being influenced by any observations made in its earlier order or in this order.
Issues Involved:
1. Maintainability of the application under Section 127B of the Customs Act, 1962. 2. Violation of principles of natural justice. 3. Jurisdiction of the Settlement Commission to review its own orders. Detailed Analysis: 1. Maintainability of the Application under Section 127B of the Customs Act, 1962: The core issue revolves around whether the application filed by the petitioners under Section 127B of the Customs Act, 1962, was maintainable. The Settlement Commission dismissed the application citing the third proviso to Section 127B, which excludes applications related to goods notified under Section 123 of the Customs Act. The petitioners had imported fabrics, which included "Polyester Satin Fabrics," "Polyester Taffeta Fabrics," and "100% Nylon Fabrics," all of which are notified goods under Section 123 as per notification No.204-CUS dated 20.07.1984. The Settlement Commission concluded that since the goods in question were notified under Section 123, the application was not maintainable. This decision was upheld by the Single Judge, and the High Court agreed, emphasizing that the goods were indeed notified under Section 123, thus attracting the third proviso to Section 127B. 2. Violation of Principles of Natural Justice: The petitioners contended that the Settlement Commission's decision was in violation of the principles of natural justice because the report from the Directorate General of Central Excise Intelligence (DGCEI) dated 7.8.2003 was not furnished to them. However, the High Court found that the Settlement Commission's decision was not solely based on the DGCEI report but also on other substantial evidence indicating that the goods were notified under Section 123. Therefore, the court concluded that there was no violation of natural justice as the decision was supported by ample material evidence. 3. Jurisdiction of the Settlement Commission to Review its Own Orders: The petitioners filed a miscellaneous application seeking a review of the Settlement Commission's order dated 21.08.2003. The Settlement Commission dismissed this application, stating it lacked the jurisdiction to review its own orders. The High Court affirmed this view, indicating that the Settlement Commission correctly interpreted its lack of power to review its decisions, and the petitioners' attempt to disguise the review as a recall was rightly dismissed. Conclusion: The High Court dismissed the writ appeal, affirming the Single Judge's order and the Settlement Commission's decision. The court held that the application under Section 127B was not maintainable as the goods were notified under Section 123. Furthermore, there was no violation of natural justice, and the Settlement Commission correctly determined it had no jurisdiction to review its own orders. The petitioners were advised to reply to the show cause notice and, if they could establish that the goods did not fall under the notification No.204-CUS dated 20.07.1984 during adjudication, they could approach the Settlement Commission again under Section 127B. Order: 1. Writ Appeal is hereby dismissed. 2. Order passed in WP No.5463/2004 on 13.4.2004 is hereby affirmed. 3. Costs made easy. Ordered accordingly.
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