9911796707
TMI Blog2001 (11) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... ious components of the aforesaid clocks from Hong Kong. It appears that during the period from 1-3-1997 to 31-8-1999, the applicant imported 172 consignments from M/s. Wellgain Precision Products Ltd., Hong Kong. Of these imports, 15 consignments were imported in Mumbai and 157 consignments at Delhi. The Directorate of Revenue Intelligence carried out search and seizure operations in September 1997 and again in August 1999 and seized certain documents. The DRI have thereafter made necessary investigation and recorded statements of Shri H.S. Chawla, Director of the applicant company in August 1999 and April 2000. These investigations are still continuing and the DRI have not issued any Show Cause Notice to the applicant. The applicant deposited an amount of Rs. 1 crore towards probable duty during the investigation. 3. In the application dated 29-1-2001, the applicant have accepted the additional duty liability of Rs. 48,52,382.01 on the ground that some of their import consignments have been under invoiced. The applicant was heard at Mumbai on 26-4-2001 and since jurisdiction of two Benches was involved in the application, the matter was referred to the Chairman of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 127B does not arise in this case. It was also submitted by the DRI that though they have not issued a SCN in this case, their investigation in respect of 36 consignments revealed that the applicant had evaded customs duty of approximately Rs. 1.14 crores and to this extent the disclosure made by the applicant amounting to Rs. 48,52,382.01 was not full and true. 7. The Bench desired to know from the advocate of the applicant and the learned Consultant of Revenue whether sub-section (2) of Section 127B was independent of sub-section (1) thereof and whether the provisions of sub-section (1) can be read into sub-section (2) of Section 127B of the Act and allowed both the parties to make written submissions in this regard. 8. The learned advocate of the applicant filed his written submissions on 10-11-2001 and the learned Consultant of Revenue filed his submissions on 5-11-2001. It is briefly submitted by the learned Advocate of the applicant that : it may be seen that Section 127B of Customs Act provides for an applicant to approach the Hon ble Commission in a case where a Bill of Entry or a Shipping Bill has been filed. By Finance Act, 2000 (10 of 2000) the words as the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127B negatory. In this context it may be seen that sub-section (1) uses the word case which has been defined in Clause (b) of Section 127A as follows : 127A(b) case means any proceeding under this Act or any other Act for the levy, assessment and collection of customs duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before a proper officer or the Central Government on the date on which an application under sub-section (1) of Section 127B is made . (Emphasis supplied) It may be seen that the case has been referred to as the one pending before a Proper Officer . The clause does not refer to the case pending with the Adjudicating Authority . Whereas a Proper Officer is a delegate, the Adjudicating Authority is a statutory authority deriving powers from the statute. This is significant since once a show cause notice is issued, the case ceases to pend with the proper officer and get transferred to the Adjudicating Authority who is competent to pass any order or decision. The distinction between a proper officer and an adjudicating authority is very relevant in the context of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction to submit a report to the Commission. In this report the Commissioner could detail all the allegations and disclose the materials in his possession. Further the Commissioner would have an opportunity to make submissions orally before the Commission. Therefore, principles of natural justice are complied with and there is no need for the formality of issue of a show cause notice. In the facts and circumstances, it is submitted that for a proper understanding and interpretation of the scheme it is necessary to read the whole Act and not read certain provisions disjointly and in isolation. It is also necessary to look into the law prevailing before the enactment and what was the mischief the legislature wanted to plug. The mischief rule, as it is called, is no longer res integra. The said rule has been applied in several cases to interpret the ambiguous law. The Wanchoo Committee report which was the guiding factor for the legislature and the setting up of the Settlement Commission appears to have provided a door for compromise to an errant tax-payer. The Committee has noted that in the administration of fiscal laws, whose primary objective is to raise revenue, there has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department to complete its investigation and arrive at a finding on the complicity of the applicant or the extent of evasion of duty by him on the basis of the seizure effected and the investigation pursuant thereto by placing a prohibition on the applicant to approach the Commission only after expiry of 180 days from the date of the seizure. In such a case, it is not necessary that Clause (a) of the first proviso to sub-section (1) of Section 127B so far as it relates to the requirement of issue of a Show Cause Notice should be complied with. If this is not so construed, sub-section (2) would be rendered redundant. In Customs and Central Excise cases, generally a show cause notice is issued after completion of investigation. If it is held that in cases involving seizure of goods or documents, an applicant cannot approach the Commission without a SCN being issued to him, then sub-section (2) would be rendered nugatory and redundant. This cannot be the intention of the Legislature. Similarly, if in a case of seizure of goods or documents, a SCN is issued to the applicant before expiry of 180 days from the date of the seizure, in that case also he should be free to approach the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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