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TMI Blog2010 (10) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... ith in accordance with law. - 1469 of 2006 - - - Dated:- 13-10-2010 - V.C. Daga and R.M. Savant, JJ. REPRESENTED BY : Shri P.S. Jetle, for the Petitioner. Shri V. Sridharan i/by PDS Legal, for the Respondent. [Judgment per : R.M. Savant, J.]. By the above Petition, filed under Article 226 of the Constitution of India, the Petitioner takes exception to the order dated 20-2-2006 passed by the Settlement Commission whereby and whereunder, the Settlement Commission settled the case of the Respondents on the following terms and conditions :- (a) Customs duty in the case settled at Rs. 7,64,952.82; (b) The applicant to pay 10% simple interest on the goods already paid by the co-applicants from the date the duty was due till it is fully paid. The Bench granted immunity to the applicant from interest in excess of 10% per annum; (c) Ordered confiscation of seized goods valued at Rs. 18,66,725/- CIF; which were far in excess of the total free baggage allowance of Rs. 25,000/- per passenger, under Section 111(l) and 111(m) of the Customs Act, 1962. However, the Commission permitted these goods to be released on payment of a token fine of Rs. 1 lakh in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id two passengers were recorded on the same day. Both of them inter alia stated that their two sons Ashish and Rahul and daughter-in-Smt. Ekta R. Raheja had brought part of these goods and part of it was consumed in London (i.e. the differential portion). The statement of Suresh Raheja was recorded under Section 108 of the said Act as also the statement of his wife Meena Raheja. Both admitted the factum of seizure, acquisition, carriage, non-declaration of the goods. Further statement of Suresh Raheja was recorded on the same day in which statement he confirmed his earlier statement also made on the same day and, further stated that he had made two visits abroad in 2004. The said Suresh Raheja was arrested under Section 104 of the said Act for the offences committed under Section 135 of the said Act. He was produced before the Addl. Chief Metropolitan Magistrate, Mumbai, when he was released on bail on 9-6-2005 in the sum of Rs. 1,00,000/- . On the same day the said Suresh Raheja submitted a demand draft of Rs. 5,00,000/- as a pre-deposit against the duty, fine penalty, if any, in respect of the goods seized. It appears that on 13-6-2005, further statement of Suresh Raheja was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 108 of the said Act on 6-10-2005 wherein she denied the knowledge regarding the goods worth Rs. 8 lakhs (i.e. the difference between the value in the purchase vouchers recovered and the actual value of seized goods in the instant case). She also denied of having brought these goods into India by her and by her husband. 3. Consequent to the investigation done by the department, a show cause notice dated 20-10-2005 was issued to five noticees for their role in the smuggling of dutiable goods and confiscation of goods and penal action under the said Act. The gravamen of the said show cause notice can be culled out from Para 31 and 32 and the charges levelled against the Respondents can be seen from Para 39 of the said show cause notice, which are reproduced herein under : Para 31 :- As per Appendix A to the Baggage Rules, 1998 notified vide notification No. 30/98-Customs (N.T.) dated 2-6-98 (as amended) the articles allowed free of duty admissible to a passenger is Rs. 25,000/- for import of new articles in accompanied baggage. The goods in excess of Rs. 25,000/- attract Customs duty @ 35% in terms of notification No. 136/90 Customs dated 20-3-1990 Education Cess of 2% on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It appears that after the deluge in Mumbai on 26-7-2005 the sealed packages in which the seized goods were kept were examined on 26-10-2005 in the presence of Respondents/Representatives and two witnesses under a Panchanama when it was found that most of the items including the writ watches and jewellery were found to be soaked and in wet condition. Respondent No. 1 Suresh Raheja and the Co-noticees i.e. the Respondent Nos. 2 to 5 herein approached the Settlement Commission under Section 127(B)(1) of the Customs Act by filing separate applications viz. Application No. SC/WZ/CUS/207-211/2005 on 21-11-2005. By the said Applications, the Respondents sought grant of immunity from imposition of penalty and prosecution under the provisions of the said Act. To the said Applications, the department filed its submissions/contentions against the admission of the said Applications, and the principal contention was that non-maintainability of the Applications under Section 127(B) of the said Act. The Settlement Commission by the common impugned order dated 20-2-2006 allowed the said Applications. In view of the ground raised by the Department of the non-maintainability of the Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso take note of the fact that the goods other than the seized watch and studded gold jewellery have been damaged and destroyed, which are still in the custody of the Revenue and which fact has been admitted by the Revenue during the hearing. Taking these facts into consideration, we ordere confiscation of the seized goods under Section 111(l) and 111(m) of the Act, but permit them to be released on payment of token fine of Rs. 1,00,000/- in lieu of confiscation. Penalty Prosecution : The Bench grants immunity to the applicant and the co-applicants from penalty and prosecution under the Act as applicable. As indicated above, it is this order dated 20-2-2006 which is impugned in the instant petition. 5. Submissions on behalf of the Petitioner/Revenue (a) That the Settlement Commission has erred in equating the gate passes of Suresh L. Raheja and other Respondents as specified under Section 77 of the said Act with the Bill of Entry. The Settlement Commission ought to have seen that since no Bill of Entry was filed, the Applications were not maintainable under Section 127B of the Act; (b) That the Settlement Commission totally mis-interpreted the judgment of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not in dispute that the jewellery which was the part of the goods was of Indian origin and during the investigation itself proof of purchase of Jewellery from India was produced before the department; (ix) That in so far as watches are concerned, there is no dispute that one watch was of foreign origin and the other was of Indian origin and, the panchanama drawn at the time of seizure also mentions that these goods were brought into India by the Respondents as baggage; (x) That there was no question of discharging burden imposed by Section 123 of the said Act as there is no dispute about the origin of the goods when the Respondents arrived in India. (xi) That the bar contained in the proviso to Section 127B would not apply to the goods whose origin is not in dispute ; (xii) That Department has accepted the order and has released baggage pursuant to the said order of the Settlement Commission. Consideration : 7. We have heard the learned counsel for the parties and have bestowed our anxious consideration to their rival contentions. 8. It is an undisputed fact that in the present case, in the show cause notice there is no mention of Section 123 of the said Act and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tt. Comm.)] having not been challenged by the department, was of the view that the contention of the Revenue that the baggage cases are not entertainable by the Settlement Commission was untenable. It is also required to be noted that during the course of the investigation, the Respondents had paid an amount of Rs. Five lakhs towards duty payable and thereafter had filed the application before the Settlement Commission. It would also be of some significance to note that the goods in question were affected by the deluge that took place in Mumbai on 26-7-2005 and the entire baggage was affected by floods and the watches and jewellery had also become wet on account of water seeping through baggage. In the said circumstances, the Respondents had pleaded that the applications to be proceeded with under Section 127C(1) of the said Act. The Settlement Commission in the said facts and circumstances, settled the case under Section 127C(1) of the said Act by directing payment of duty in the sum of Rs. 7,64,952.82 with simple interest at 10% p.a. and fine of Rs. 1,00,000/- in lieu of confiscation. The Settlement Commission, however, granted immunity to the Respondents from penalty and prosecu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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