2003 (5) TMI 73 - HC - Customs

Summary

Issues Involved:
1. Jurisdiction of the Settlement Commission.
2. Validity of the Commission's order regarding additional duty liability.
3. Procedural irregularity in the Commission's order.
4. Relief of Modvat Credit against additional customs duty.

Detailed Analysis:

1. Jurisdiction of the Settlement Commission:
The petitioner challenged the Commission's jurisdiction to determine the liability for 107 consignments, arguing that their application under Section 127B of the Customs Act related only to 28 consignments. The court examined the application and noted that the petitioner had sought settlement for the period from 1 January 1997 to 31 August 1999, covering all imports during that period. The court found that the application was not limited to 28 consignments but pertained to the entire period of investigation. Therefore, the Commission had jurisdiction to determine the duty liability for all 107 consignments covered by the show cause notices. The court concluded that the Commission's order was within its jurisdiction.

2. Validity of the Commission's Order Regarding Additional Duty Liability:
The petitioner contended that there was no evidence of under-valuation for 71 Bills of Entry. The court held that, given the nature and source of the goods were the same, the Commission's adoption of comparable values for the goods was valid, especially since the petitioner had admitted under-valuation for 28 consignments. The court emphasized that it is not within the scope of judicial review to question the validity of the Commission's determination of tax liability, as long as the order is in accordance with the provisions of the Act.

3. Procedural Irregularity in the Commission's Order:
The petitioner argued that the Commission's order suffered from procedural irregularity because the report was called from the Directorate of Revenue Intelligence (DRI) instead of the Commissioner concerned. The court dismissed this argument as hyper-technical, noting that the investigations were being conducted by the DRI, which had possession of the relevant records. Therefore, it was appropriate for the Commission to call for the report from the DRI.

4. Relief of Modvat Credit Against Additional Customs Duty:
The petitioner claimed that the Commission failed to grant relief of Modvat Credit against the additional customs duty demanded. The court observed that the impugned order did not discuss this issue. Although the Revenue argued that the petitioner was not entitled to Modvat Credit as they had not paid any countervailing duty on the under-invoiced components, the court allowed the petitioner to move an appropriate application before the Commission regarding this claim. The court expressed confidence that the Commission would deal with such an application on its merits.

Conclusion:
The court dismissed the writ petition, upholding the Commission's jurisdiction and the validity of its order. It also rejected the procedural irregularity claim and allowed the petitioner to seek relief for Modvat Credit before the Commission. The interim order dated 16 September 2002 was vacated, and no costs were ordered.