2017 (12) TMI 1456 - HC - Customs

Applications u/s 127B(1) of the CA, 1962 - applications were rejected by the CCESC on the ground that there does not appear to be any meeting ground between the assertions of the applicant and the Revenue and in such a situation the case is not amenable for settlement. Held that - the essential requirement for the CCESC to consider the application in terms of Section 127B of the Act is that the applicants should make a full and true disclosure of all material facts relevant to their duty liability, which had not been earlier been disclosed, and also make disclosure of the manner in which the said liability was incurred - the Court is of the view that in the present case the CCESC ought not to have declined to examine the petitioners applications only because there was no meeting ground between the petitioners and the revenue. The applications filed by the petitioners before it are restored to its file to be taken up for fresh hearing and decision on merits.

Issues involved:
Challenge to order of Customs and Central Excise Settlement Commission (CCESC) under Section 127B(1) of the Customs Act, 1962 for dismissal of applications based on lack of meeting ground between applicant and Revenue, failure to resolve matters in settlement proceedings, and non-disclosure of essential facts relevant to duty liability.

Analysis:

1. Dismissal of Applications by CCESC:
The petitioners challenged the order of CCESC dated 31st December, 2014, dismissing their applications under Section 127B(1) of the Customs Act, 1962. CCESC rejected the applications citing lack of meeting ground between the assertions of the applicants and the Revenue, stating the case was not amenable for settlement. The decision was based on the belief that matters agitated required examination of documents and facts beyond settlement proceedings, referencing the case of Union of India v. Dharampal Satyapal.

2. Contentions of the Petitioners:
The petitioners, through their counsel, argued that they had made a partial admission of the duty liability and offered to pay a significant amount of the demand raised by the Directorate of Revenue Intelligence (DRI). They contended that the essential requirement for CCESC consideration was a full and true disclosure of all material facts, which they had fulfilled. The petitioners highlighted that rejection based on lack of meeting ground was not a valid reason under the provisions of Chapter XIV-A of the Act.

3. Review of CCESC Decision:
Upon review, the Court found that the CCESC had not concluded that the essential disclosure requirements were not met by the petitioners. The CCESC's task was to assess if the petitioners had made a full and true disclosure, considering their response to the report prepared by the DRI. The Court also noted previous instances where similar issues were decided by CCESC, emphasizing the need for a consistent approach in resolving disputes related to duty liability.

4. Comparison with Previous Judgments:
The Court distinguished the present case from Union of India v. Dharampal Satyapal, where the Supreme Court had set aside a decision due to a significant variance between the duty demand and the amount admitted by the assessee. In contrast, the petitioners in this case had offered and paid a substantial sum in relation to the total duty demand, making the situation distinguishable.

5. Court's Decision:
Based on the above analysis, the Court set aside the CCESC's order and directed the applications to be restored for fresh hearing and decision on merits. The CCESC was instructed to hear the parties and pass a final order within four months from the specified date, aiming for a prompt resolution of the pending applications.

In conclusion, the judgment addressed the dismissal of applications by CCESC, the petitioners' compliance with disclosure requirements, comparison with previous judgments, and the Court's decision to restore the applications for further consideration.

← Previous Next →