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2019 (8) TMI 786 - HC - CustomsMaintainability of Settlement Application - requirement of fulfilment of condition precedent that an applicant should pay differential customs duty for said Settlement Commission to entertain the application - Section 127-B of Customs Act - Valuation of imported goods - Import of consignment - Christmas Gift Items - HELD THAT - This Court notices that there is no disputation that Bank Guarantees have been renewed from time to time and that they are subsisting. This Court also notices that consignment is Christmas Decoration Items even according to Customs Department and therefore, it is not a case of contraband or prohibited item. In other words, this Court is also of the considered view that said consignment is extremely innocuous and there is no issue regarding importability of said consignment - Writ petitioner has also shown his bona fide by not only furnishing Bank Guarantees for a total sum of ₹ 25,50,000/-, but also by renewing the same from time to time. This Court is left with the considered view that this is an appropriate case for directing the second respondent Settlement Commission to entertain the application of writ petitioner being application dated 16.10.2018, after first respondent appropriates the Bank Guarantees for a total sum of ₹ 25,50,000/- - After encashment of Bank Guarantees in the aforementioned manner by first respondent, the second respondent/ Settlement Commission shall take up application of the writ petitioner being application dated 16.10.2018 under Section 127-B of the said Act, seeking waiver of fine, penalty and immunity from prosecution qua said consignment, hear the application of the writ petitioner on its own merits and dispose of the same. Petition disposed off.
Issues:
Valuation dispute of imported consignment, compliance with conditions precedent for Settlement Commission application, appropriateness of Bank Guarantees, rejection of application based on non-compliance. Valuation Dispute: The case involved a consignment of gift items imported from China, specifically 'Christmas trees, water bottles, etc.' The Customs Department contested the valuation by the importer, leading to a difference of over ?10 lakhs. The nature of the goods was not disputed, only the valuation, triggering a 'Show Cause Notice' from the Customs Department. Compliance with Conditions Precedent: The importer sought Settlement Commission's intervention by applying under Section 127-B of the Customs Act, 1962. However, the application was dismissed due to non-compliance with the condition precedent of paying the differential duty. The importer had furnished Bank Guarantees for provisional clearance, which were to be appropriated for the Settlement Commission's consideration. Appropriateness of Bank Guarantees: The Court noted that the Bank Guarantees, totaling ?25.5 lakhs, were renewed and subsisting, indicating the importer's bona fides. The consignment was deemed innocuous, and there was no issue with importability. The Court directed the Settlement Commission to entertain the application after the Bank Guarantees were appropriated as per the Act's provisions. Rejection Based on Non-Compliance: The Court set aside the Settlement Commission's order solely due to non-compliance with the condition precedent. The First respondent was directed to appropriate the Bank Guarantees within a specified time frame. Following this, the Settlement Commission was instructed to consider the importer's application expeditiously and communicate the decision within a set timeframe. This detailed analysis covers the key issues of the judgment, including the valuation dispute, compliance with conditions precedent, appropriateness of Bank Guarantees, and the rejection of the application based on non-compliance. The Court's decision focused on ensuring procedural compliance while addressing the specifics of the case to provide a fair resolution.
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