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TMI Blog2015 (11) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... he ingredients of Section 123 are attracted and application of the petitioner would squarely fall within 3rd proviso of Section 127B of the Act. Petitioners are yet to reply to the show cause notice. The dismissal of the application filed before the Settlement Commission as affirmed by the learned Single Judge which has been confirmed by us, would not prevent the writ petitioners to file reply to the said show cause notice and during the course of the adjudication proceedings, if the petitioners are able to establish that goods in question do not fall under the notification No.204-CUS dated 20.07.1984, it would be open to them to approach the Settlement Commission under Section 127B of the Act. In such an event, Settlement Commission shall adjudicate the application without being influenced by any observations made in its earlier order or in this order. - Writ Appeal 2527/2004 - - - Dated:- 25-6-2015 - Mr. Vineet Saran And Mr. Aravind Kumar, JJ For the Petitioner : Sri Uday Holla, Sr.Counsel a/w Sri Brijesh Patel, Adv For the Respondent : Sri Jeevan J Neeralgi, Standing Adv. JUDGMENT In this intra-court appeal, writ petitioners are calling in question t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not justified in rejecting the application filed by the petitioner as not maintainable that too by relying upon the report of the DGCEI dated 7.8.2003 which report was not furnished to the petitioners and as such, impugned order being in violation of principles of natural justice, same is liable to be set aside and he prays for direction being issued to Settlement Commission to adjudicate the application on merits and in accordance with law. In support of his submission, learned counsel has relied upon the following cases: Union of India Ors Vs Mohd. Ramzan Khan (1991) 1 SCC 588 Sona Builders Vs Union of India Ors (2001) 10 SCC 280 State of Assan Anr Vs Mahendra Kumar Das Ors 1970(1) SCC 709 R Shamanna Vs State Bank of Mysore, Bangalore ILR 2003 KAR 4467 N Krishnan (Dead, by LRs) Vs Settlement Commission Ors 1989 (180) ITR 585 Hazel Mercantile Ltd Vs Union of India 2012 (285) ELT 352 5. Per contra, Sri Jeevan J Neeralgi, learned counsel appearing for the Revenue has supported the orders passed by the Settlement Commission as well as the order of learned Single Judge by contending that 3rd proviso to Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the learned advocates appearing for the parties and on perusal of entire case paper s, we have bestowed our careful consideration to the rival contentions raised at the bar. We are of the considered view that orders passed by the Settlement Commission as well as learned Single Judge do not call for interference for the reasons indicated herein below : (a) Petitioner is a 100% Export Oriented Unit (for short EOU ) with Customs Department for in-bond manufacturing activity and it is engaged in the manufacture and export of ready made garments. Certain imports of fabrics made wholly or mainly of synthetic yarn were cleared by availing exemption u nder the Customs notification No.53/97 dated 03.06.1997 and Central Excise notification No.1/95 dated 04.01.1995 as amended and applicable to a 100% EOU. (b) Based on the intelligence gathered by DGCEI that the applicant has diverted the fabric and other goods imported duty free for purposes other than manufacture of ready made garments for exports, simultaneous search operations was conducted on 23.05.2002 in different premises including the premises of the companies belonging to the same group to which petitioner belongs. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they are not smuggled goods would be on the person from whose possession such goods are seized. It is not in dispute that the goods which came to be imported by the writ petitioner was under the relevant EXIM policy that was prevailing then. Petitioner on such importation was required to export the goods and as such, mandatorily required to store the said goods in a bonded ware house . The records would also disclose that when the Proper Officer seized the said goods, it was not in the bonded ware house but outside such bonded ware house 8. Be that as it may, the moot question which arises in this case is whether 3rd proviso to Section 127B of the Act is attracted or not? Goods in question, according to the petitioners, would comprise of bot h cotton as well as nylon and in support of the same, petitioners have heavily relied upon the Bill of Entries produced before the Settlement Commission. 100% nylon fabrics have been notified under Section 123 of the Act as per notification No.204 CUS dated 20.7.19 84 which covers fabrics made wholly or mainly of synthetic yarn . The Bill of Entries filed before the Settlement Commission would also indicate, mostly the fabrics are nyl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the notification No.204-CUS dated 20.7.1984. It is no doubt true that this Court, being the appellate Court and appeal proceedings being continuation of the origin al proceedings, has got ample power to set right the illegalities, if committed by statutory authorities . However, in the facts obtained in the present case As already noticed herein above, we are of the considered view that such illegality alleged is conspicuously absent for this Court to exercise such power. Merely because goods in question are exported under a Bill of Entry and as such 3 rd proviso would be attracted only to goods imported illicitly or smuggled goods and thereby application filed by the petitioner before Settlement Commission ought to have been accepted by it would be erroneous, inasmuch as, even in cases of clandestine importation, there will be no Bill of Entry and eve n in such circumstances, an application for settlement cannot be filed since filing of Bill of Entry is a condition precedent to entertain an application before Settlement Commission as indicated in clause (a) of first proviso to sub-section (1) of Section 127B of the Act. Hence, even in respect of an application filed in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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