2015 (12) TMI 537 - HC - Customs

Power of Settlement Commission to entertain the matter pertaining to Gold - Seizure of goods - Illicit import of goods - Imposition of interest and penalty - Held that - Respondent sought to place reliance on the decision of this Court in Commissioner of Customs v. Ashok Kumar Jain 2013 (8) TMI 317 - DELHI HIGH COURT . But, the decision in Ashok Kumar Jain (supra) was distinguished inasmuch as the issue of Section 123 had not been considered at all. It was finally observed, upon a plain reading of the provisions, that an application under Section 127B cannot be made in respect of, inter alia, gold which is specifically an item to which Section 123 applies. That being the position, the application filed by the respondent under Section 127B could not have been proceeded with at all. The learned counsel for the respondent No.1 submitted that the petitioner/revenue never objected before the Settlement Commission and even accepted the penalty and fine which were imposed by the Settlement Commission. It was also contended that the petitioner had gone to the extent of issuing a release letter dated 08.06.2015 subsequent to the order of the Settlement Commission. But, we cannot agree with this submission of the learned counsel for the respondent No.1 inasmuch as there cannot be any estoppel against the statute. Once the statute is clear that where the subject matter is gold , the Settlement Commission would not have any jurisdiction to entertain the application under Section 127B, any order passed in contravention of the statute cannot be sustained on the ground of estoppel. - Impugned order is set aside - Decided in favour of Revenue.

Summary

Issues:
1. Jurisdiction of the Settlement Commission in settling cases related to 'gold'.
2. Application of Section 123 of the Customs Act in relation to goods like 'gold'.
3. Validity of the settlement order passed by the Settlement Commission.

Issue 1: Jurisdiction of the Settlement Commission in settling cases related to 'gold'.

The judgment deals with a petition challenging the final order passed by the Custom and Central Excise Settlement Commission in a case involving 'gold'. The Settlement Commission had settled the case under Section 127C (5) of the Customs Act, 1962, allowing the settlement application based on admissions of illicit import and cooperation by the applicant. The Settlement Commission imposed penalties and fines while granting immunity from prosecution. However, the petitioner argued that the Settlement Commission lacked jurisdiction to settle cases related to 'gold', citing Section 127B and Section 123 of the Customs Act. The court, based on the provisions, held that no settlement application could be entertained if it pertained to goods covered under Section 123, which includes 'gold'. The court agreed with the Revenue's contention that the Settlement Commission did not have jurisdiction in such cases, and the application should not have been entertained.

Issue 2: Application of Section 123 of the Customs Act in relation to goods like 'gold'.

Section 123 of the Customs Act deals with the burden of proof in cases involving seized goods, including 'gold'. The court emphasized that Section 123 specifically applies to goods like 'gold', as mentioned in the Act. The court noted that the Settlement Commission entertained an application related to 'gold' despite the clear bar provided in the Act. The court referred to a previous decision where it was held that an application under Section 127B cannot be made concerning items like 'gold', to which Section 123 applies. The court reiterated that the Settlement Commission lacked jurisdiction to entertain applications related to 'gold' due to the statutory provisions.

Issue 3: Validity of the settlement order passed by the Settlement Commission.

The court allowed the writ petition challenging the settlement order, setting it aside due to the lack of jurisdiction of the Settlement Commission in cases involving 'gold'. The respondent was directed to revert to the stage when the show cause notice was issued and given an opportunity to respond before the adjudicating authority. All amounts paid by the respondent were to be adjusted based on the adjudication outcome. The court emphasized that statutory provisions cannot be overridden by estoppel, and any order contrary to the statute cannot be upheld. The judgment concluded by granting relief to the petitioner and outlining the process to be followed post-setting aside the settlement order.

This detailed analysis of the judgment highlights the key issues of jurisdiction, statutory provisions, and the validity of the settlement order, providing a comprehensive understanding of the legal aspects involved in the case.