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TMI Blog2007 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- (CIF). On the same day i.e., on 19.7.2000, M/s. Goutham Enterprises sent a letter to the Assistant Commissioner of Customs, SIIB Air Cargo Complex, Chennai stating that they have received a cargo arrival notice for ACER CD ROM drive, 50X and they had not placed any order for supply of the same. 3. On 24.7.2000, the appellant - Managing Director of Moonstar Automation Private Limited claimed the goods. The goods were examined in the presence of the appellant and one Shanthilal of Goutham Enterprises and two independent witnesses. The consignment found to contain 246 Nos. of Acer 50X CD ROM drive, 736 Nos. of Cellular mobile phones with chargers and battery back, 35 Nos. of Ear phones and 100 Nos. of plastic flip top and 6 Nos. of hard disc drive for a total CIF value of Rs.43,56,189/-. Since the description and the value of the goods did not tally with the bill of entry, the consignment was seized on 24.7.2000 under a mahazar. The SIIB of the Customs House, Chennai conducted further investigation by recording statements from the appellant, clearing house agent, the steamer agent and one S. Janakiraman. After gathering such information on 19.9.2000, the first respondent issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring for the first respondent contended that the scheme of settlement, particularly, the provision under this Chapter XIV-A would apply only to the bona fide importer, who admits the short levy on account of mis-classification or otherwise of the goods, but not apply to the person like the appellant, who has calculatedly filed the bill of entry in the name of third person and sought to evade the duty legally payable for clearance of the goods. The action of the appellant is nothing but smuggling the goods into India without payment of duty, which would not in any way come within the purview of Section 127-B or 127-C. If the duty evaders like that of the appellant are allowed to settle the case before the Settlement Commission, then the other provisions - Sections 110 and 111 would virtually become meaningless. The order of the learned single Judge requires no re-consideration. 8. We have heard the argument of the learned counsel on either side and perused the materials on record. 9. The point to be resolved in this case is, whether in the facts and circumstances of the case, the power conferred on the Settlement Commission under Section 127-B would include the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to the goods to which Section 123 applies; (or) to goods in relation to which any offence under Narcotic Drugs and Psychotropic Substances Act, 1985 has been committed; (vi) No application shall be made for interpretation of the classification of the goods under Customs Tariff Act, 1975; (vii) Where any dutiable goods, books of account, other documents or any sale proceeds of the goods have been seized under Section 110, the application could be filed only after the expiry of 180 days from the date of seizure (sub-section (2)); (viii) Every such application shall be accompanied by such fee specified by Rules; (ix) An application filed shall not be allowed to be withdrawn." 12. Now, let us consider whether the facts of the case come within the above requirement of the statutory provisions. As stated supra, a show cause notice dated 19.9.2000 has been issued under Section 124 of the Customs Act against the appellant by the proper officer. The relevant clauses in the show cause notice are as follows: (a) the goods filed under Bill of Entry No.235337 dated 19.7.2000 do not conform to the declaration made in the bill. As against the declaration of 300 Nos of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be specified by Rules including the particulars of such dutiable goods in respect of which the applicant admits short levy on account of mis-classification or otherwise of the goods, is not applicable rather put against the appellant, as there is no provision specifically contained in the Customs (Settlement of Cases) Rules, 1999. Thus, all the conditions of the main provision of Section 127-B(1) have been complied with in this case. 15. Now, reverting to the conditions stipulated in the proviso, which are extracted supra, it is an admitted fact by the respondent themselves that the appellant had filed bill of entry in respect of import of goods, as could be seen from the extracted portion of the show cause notice. So, condition No.(i) of the proviso has been complied with. The proper officer has also issued a show cause notice dated 19.9.2000 in relation to the bill of entry filed by the appellant. As such, condition No.(ii) contemplated in the proviso has also been complied with. Admittedly, in this case, the additional amount of duty accepted by the appellant in his application exceeds Rs.2 lakhs. Hence, condition No.(iii) of the proviso has also been complied with. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents or any sale proceeds of the goods have been seized under Section 110, the application for settlement can be filed only after the expiry of 180 days from the date of seizure (sub-section (2)). In this case, the dutiable goods has been seized on 24.7.2000. However, the application has been made by the appellant within a period of six months. In the case of Narsingh Das Tapadia reported in 2000 SCC (CRI) 1326, the Supreme Court has held that such an application would not vitiate the proceedings. Hence, on that ground, the appellant cannot be non-suited. Conditions Nos.(viii) and (ix) of the proviso have not been infringed in this case. Hence, all the requirements as contemplated under Section 127-B and the proviso thereto have been complied with. As stated above, condition No.(vii) of the proviso which speaks about the dutiable goods, books of account, other documents or any sale proceeds of the goods have been seized under Section 110, the application could be filed after the expiry of 180 days from the date of seizure is a pointer to come to the conclusion even for the goods seized under Section 110, which are liable for confiscation under the Customs Act, are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of levy, assessment and collection of customs duty and as such the dispute will not come within the purview of Section 127-B, which contention was found in favour of the Department by the learned single Judge. We are not able to countenance this contention also for the reason that as per second limb of Section 125 of the Customs Act, if the goods confiscated are not prohibited goods, an option has to be given to the importer to pay, in lieu of confiscation, such fine i.e., the redemption fine. In such case, the importer has to pay duty and charges payable in respect of such goods. In order to arrive at the duty and charges payable under Section 125, an assessment has to be made, the duty has to be levied and collection has to be made for the purpose of giving effect to the second limb of Section 125. For the aforesaid reasons, the contention that the dispute in the present case does not involve levy, assessment and collection has to be rejected and the same is rejected. The Division Benches of the Bombay High Court in the case of Union of India v. Hoganas India Limited reported in 2006 (199) E.L.T. 8 and Tata Teleservices (Maharashtra) Limited v. Union of India repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, it is mandatory that the applicant could file an application only after show cause notice is issued, which show cause notice would pertain even for confiscation of goods on the ground of fraud or smuggling or deliberate mis-declaration. Such show cause notice is condition precedent before making an application. Having regard to the above statutory ingredient, there could never be any case of filing of an application under Section 127-B before initiation of any action by the Department or of voluntary aspect under the Customs Act. 21. Section 127-C of the Act provides for the procedure to be followed by the Settlement Commission and power has been vested with the Settlement Commission to order provisional attachment for protecting the interest of the revenue under Section 127-D. Even power has been vested on the Settlement Commission to re-open the completed proceedings under Sections 127-E and F. Under Section 127-H, power is vested with the Settlement Commission even to grant immunity from prosecution. In cases of non-cooperation by the applicant, under Section 127-I, power is also vested with the Settlement Commission to send back the case to the proper officer for a ..... 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