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2021 (6) TMI 371 - HC - CustomsModification of order of Settlement Commission - Import of refurbished hard disk - Absolute Confiscation of seized goods - goods seized from petitioner's godown - goods were destroyed in the fire accident - Insurance claim settled by Insurance Company has to be paid to the Customs Department or petitioner when the goods were absolutely confiscated without any redemption fine - HELD THAT - In the decision of the Hon'ble Supreme Court in UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. 2011 (2) TMI 6 - SUPREME COURT where it was held that the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to the imposition of simple interest @ 10% per annum was passed in accordance with the provisions of Rule 14 but the High Court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. The facts on record indicate that petitioner has got substantial relief despite past dalliances of violating law. The petitioner had got habituated of importing refurbished hard disk contrary to the provisions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 and the provisions of the Foreign Trade Management (Development And Regulation) Act, 1992 - first respondent Settlement Commission has ordered absolute confiscation of the seized goods which were in the custody of the petitioner which were allegedly lost in the fire accident in the petitioner s godown in Bangalore. The goods would have absolutely stood vested with the Government in terms of Section 126 of Customs Act, 1962 if adjudication proceedings were allowed to go on or in the alternative, allowed to be redeemed by the petitioner on payment of redemption fine under Section 125 of the Customs Act, 1962. The order of the first respondent Settlement Commission is a package and it is not a substitute for an adjudication order that would have been passed by an adjudicating authority under the Act. It is for the petitioner to take advantage of it as it is or face the consequences by violating it - petition dismissed.
Issues Involved:
1. Confiscation of goods 2. Denial of exemption benefit under Central Excise Notification No.12/2012-CE 3. Demand for differential duty 4. Imposition of interest under Section 28AA of the Customs Act, 1962 5. Classification of goods as refurbished 6. Liability for penalty under Section 112(a) and Section 114AA of the Customs Act, 1962 7. Appropriation of voluntarily paid amounts towards duty, interest, and other liabilities 8. Finality of the Settlement Commission's order under Section 127J of the Customs Act, 1962 9. Legality of the Settlement Commission's order 10. Petitioner's entitlement to relief for goods destroyed in a fire Detailed Analysis: Confiscation of Goods: The petitioner was aggrieved by the confiscation of goods valued at ?91,93,230/- and ?14,72,634/- seized from their godown in Bangalore. The Settlement Commission ordered absolute confiscation under Section 111(d), 111(m), and 111(o) of the Customs Act, 1962, read with Rule 17 of the Hazardous Wastes (Management, Handling, and Transboundary Movement) Rules, 2008, and Section 11(1) of the Foreign Trade (Development and Regulation) Act, 1992. The petitioner contended that the confiscated goods were destroyed in a fire accident and sought relief similar to that granted for other goods where redemption fines were imposed instead of absolute confiscation. Denial of Exemption Benefit: The Show Cause Notice issued to the petitioner questioned the exemption benefit claimed under Central Excise Notification No.12/2012-CE dated 17.03.2012 for 17 bills of entry. The Settlement Commission upheld the denial of this benefit, leading to the demand for differential duty. Demand for Differential Duty: The differential duty amounting to ?61,26,333/- was demanded under Section 28(1) of the Customs Act, 1962. The petitioner had already paid this amount during the investigation, and the Settlement Commission confirmed no further liability in this regard. Imposition of Interest: Interest liability amounting to ?3,78,852/- was imposed under Section 28AA of the Customs Act, 1962. The petitioner had also paid this amount during the investigation, and the Settlement Commission confirmed no further liability. Classification of Goods as Refurbished: The Show Cause Notice alleged that the imported goods were refurbished and thus violated the Hazardous Wastes (Management, Handling, and Transboundary Movement) Rules, 2008. The Settlement Commission upheld this classification and ordered absolute confiscation for the refurbished goods. Liability for Penalty: Penalties were imposed on the petitioner and the Managing Director under Section 112(a) and Section 114AA of the Customs Act, 1962. The Settlement Commission imposed a penalty of ?3,00,000/- on the petitioner and ?50,000/- on the Managing Director, granting immunity from prosecution upon payment. Appropriation of Voluntarily Paid Amounts: The petitioner had voluntarily paid ?61,26,333/- and ?3,78,852/- during the investigation, which the Settlement Commission appropriated towards duty and interest liabilities. Finality of the Settlement Commission's Order: As per Section 127J of the Customs Act, 1962, the order of the Settlement Commission is final and conclusive. The court noted that ordinarily, it is not open for the petitioner to re-open the settled matters except under specific circumstances such as fraud or misrepresentation. Legality of the Settlement Commission's Order: The court referenced the Supreme Court's decision in Union of India vs. Ind-Swift Laboratories Limited, stating that orders of the Settlement Commission could only be interfered with if found contrary to any provisions of the Act. The court found no irregularity in the Settlement Commission's order and noted that the petitioner had received substantial relief despite past violations. Petitioner's Entitlement to Relief for Goods Destroyed in Fire: The petitioner argued that the insurance claim for the destroyed goods should be paid to them rather than the Customs Department. The court held that the petitioner could not selectively accept favorable parts of the Settlement Commission's order while rejecting adverse parts. The petitioner's request for relief was denied, and the court emphasized that the Settlement Commission's order is a package deal. Conclusion: The Writ Petition was dismissed, with the court finding no merit in the petitioner's claims. The Settlement Commission's order was upheld, and the petitioner was reminded that they could not approbate and reprobate the order. The connected Miscellaneous Petition was also closed.
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