2018 (8) TMI 337 - HC - Customs

Validity of order passed by the Settlement Commission - Section 127B, sub-section (1) proviso (a) of CA - The conclusion of the Settlement Commission is that, the petitioner/applicant has failed to satisfy it that he has complied with the requirement of proviso (a) by producing a Show Cause Notice or referring to it at least in his application. Held that - It is entirely for the petitioner to seek refund, but if he seeks it and the monies are lying with the Revenue beyond 30.9.2018, but without compliance with our direction, then, on receipt of the request from the petitioner made in writing, the said amount shall be refunded within a period of eight weeks from the date of receipt of that application. Petition disposed off.

Summary

Issues:
Challenge to Settlement Commission's order under Article 226 - Failure to produce Show Cause Notice - Impact of recent amendments to Customs Act, 1962.

Analysis:
The writ petition challenges the Settlement Commission's order dated 13.6.2018, contending that the petitioner failed to produce a Show Cause Notice as required under Section 127B of the Customs Act, 1962. The Commission held that without the issuance of a Show Cause Notice, the petitioner cannot invoke its jurisdiction. The Revenue supported this view citing various judgments, including those of the Supreme Court and the High Court.

The Court noted significant amendments to the Customs Act, 1962, introduced by the Finance Act No.13 of 2018, which were not considered in the impugned order. These amendments pertain to Sections 110 and 124 of the Act, introducing provisions for extension of seizure periods and supplementary notices. The Court observed that these amendments could have a substantial impact on the case at hand.

Considering the potential impact of the recent amendments, both parties agreed to dispose of the writ petition without delving into detailed reasons or the effect of the amendments on previous judgments. The Court decided to maintain the Settlement Commission's order in the current case but directed the Revenue to serve a Show Cause Notice to the petitioner by a specified date. Upon receipt of the notice, the petitioner could file a fresh application before the Commission, ensuring strict adherence to the law. The Court kept all questions regarding the application's maintainability and merits open for future consideration.

Furthermore, if the Show Cause Notice was not issued by the specified date, the Revenue was instructed to refund the sum deposited by the petitioner as duty and interest payment. The Court clarified that the refund should not prevent the Revenue from taking appropriate legal steps. The petitioner could seek a refund of the deposited amount, and if not refunded within the stipulated time frame, the Revenue must process the refund within eight weeks upon receiving a written request from the petitioner.

Ultimately, the Court disposed of the writ petition without imposing any costs, leaving the broader legal issues and questions raised in the case open for future adjudication in an appropriate context.