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2020 (2) TMI 701 - HC - CustomsMaintainability of Settlement Commission - applicability of Section 123 of CA on cigarettes - prohibited goods or not - HELD THAT - It appears that looking to the provisions of Section 127B especially, third proviso thereof, no application could have been made by the respondent in relation to the goods to which Section 123 of the Customs Act, 1962 applies. In the facts of the present case, show cause notice was issued to this respondent on 7th April, 2017 (Annexure P-11 to the memo of this writ petition). The goods involved in this case is cigarettes which is a notified item. The Central Government notification is dated 25th July, 2016 with Notification No.103/2016 Customs(NT). Once the goods in question are covered under Section 123, no application could have been preferred by the respondents under Section 127B of the Customs Act, 1962. The first application was preferred on 16.08.2017, the second was preferred on 11.12.2017 and the third application was preferred on 12.12.2017 which are subsequent to the aforesaid notification dated 25th July, 2016. Thus, by no stretch of imagination it can be said that the Settlement Commission had any power, jurisdiction and authority to decide an application preferred by the respondent under Chapter XIV of the Customs Act, 1962. It is well settled that an order passed by a Court cannot be so interpreted as permitting a statutory authority to act in violation of the statute. We are unable, therefore, to extend the order of the High Court of Punjab and Haryana as permitting the Settlement Commission to entertain the application, filed by the respondents before it on merits, even in the face of the expressed statutory proscription contained in the third proviso to serve Section 127B of the Customs Act. The order dated 15th February, 2018 (Annexure P-1 to the memo of this writ petition) passed by the Settlement Commission is set aside - petition disposed off.
Issues Involved:
1. Maintainability of applications before the Settlement Commission under Section 127B of the Customs Act, 1962. 2. Jurisdiction of the Delhi High Court to hear the matter. 3. Validity of the Settlement Commission's reliance on the Supreme Court judgment in DGFT vs. Kanak Exports. 4. Competence of the Directorate of Revenue Intelligence (DRI) to file the writ petition. Issue-wise Detailed Analysis: 1. Maintainability of Applications before the Settlement Commission: The primary issue was whether the Settlement Commission could entertain applications under Section 127B of the Customs Act, given that cigarettes were notified under Section 123 at the time of application. The court noted that the third proviso to Section 127B explicitly prohibits applications for goods to which Section 123 applies. The cigarettes were notified under Section 123 by Notification No.103/2016-Customs(NT) dated 25th July 2016. The respondents filed their applications on 16.08.2017, 11.12.2017, and 12.12.2017, well after the notification date. Therefore, the applications were statutorily incompetent, and the Settlement Commission had no jurisdiction to entertain them. The court cited various legal precedents to emphasize that the term "made" means "filed" and that the proscription attaches at the time of making the application. 2. Jurisdiction of the Delhi High Court: The respondents argued that the Delhi High Court lacked territorial jurisdiction as the show cause notices were issued, and the imports took place within the jurisdiction of Punjab and Haryana. However, the court rejected this objection, referencing a Division Bench decision in Vishnu Security Services vs. Regional Provident Fund Commissioner, which held that the Delhi High Court has jurisdiction if the quasi-judicial authority's order being challenged was passed within its territorial jurisdiction. Since the impugned order was passed by the Principal Bench of the Settlement Commission in New Delhi, the Delhi High Court had jurisdiction to hear the matter. 3. Validity of the Settlement Commission's Reliance on the Supreme Court Judgment in DGFT vs. Kanak Exports: The Settlement Commission had relied on the Supreme Court judgment in DGFT vs. Kanak Exports to argue that the notification could not be given retrospective effect. The court found this reliance misplaced, stating that the maintainability of the application must be assessed based on the goods' notification status at the time of the application, not the importation date. Hence, the Settlement Commission's interpretation was incorrect, and the applications were not maintainable. 4. Competence of the Directorate of Revenue Intelligence (DRI) to File the Writ Petition: The respondents contended that the writ petition was not maintainable at the instance of the DRI and should have been filed by the Commissioner. The court dismissed this argument, stating that the DRI, which issued the show cause notices and effected the seizure, was indeed the aggrieved party. Therefore, the DRI was competent to file the writ petition against the Settlement Commission's order. Conclusion: The court concluded that the Settlement Commission lacked jurisdiction to entertain the applications filed by the respondents under Section 127B of the Customs Act, as the goods (cigarettes) were notified under Section 123 at the time of application. The objections regarding territorial jurisdiction and the competence of the DRI to file the writ petition were found to be without merit. Consequently, the order dated 15th February 2018 passed by the Settlement Commission was quashed and set aside. The writ petition was disposed of accordingly, and the connected application was rendered infructuous.
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