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TMI Blog2016 (5) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporates the applicability clause of Section 123 for the ouster of the jurisdiction of the Settlement commission. It has nothing to do with the eventuality of shifting of burden of proof. It is perhaps because of this reason that the Settlement Commission in the Special Bench judgment in case of Idris Y.Porbunderwala (supra) used the expression “invocability of the provisions of Section 123”. There is nothing in the 3rd proviso to subsection (1) to Section 127B which would indicate that it envisaged satisfaction of the conditions for invoking sub-section (1) of Section 123 before the jurisdiction of the Settlement Commission can be ousted. It only refers to the goods to which Section 123 applies. Applicability of Section 123 to the goods and the invocability of the principle of shifting of burden of proof are two independent and distinct issues. Applicability of Ratio of decision of different High Courts - Being a central statute bearing tax implications, we would, even otherwise, be slow in taking different view from two reasoned judgments of other High Courts. Even if, therefore, another view was possible, for the sake of consistency, we would have respectfully followed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the petitioner applied to the Settlement Commission on 19.03.2015 and requested for settlement in terms of Chapter-XIVA of the Act. On such application, the Customs Department raised objection of the jurisdiction of the Settlement Commission contending that the goods are such to which Section 123 of the Act applies and that therefore, in terms of the 3rd proviso to Section 127B of the Act, the Settlement Commission would have no jurisdiction to entertain application of the petitioner for settlement. 2.2 The Commission passed its impugned order dated 15.12.2015 and relying on the decision of the Delhi High Court in case of Additional Commissioner of Customs Vs. Ram Niwas Verma, reported in 2015 (323) ELT, page N.424, dismissed petitioner's application. 3. In case of Special Civil Application No.3146 of 2016, the petitioners are manufacturers of textile. They had imported polyester fabrics by filing bill of entries. Subsequently, the Director of Revenue Intelligence conducted inquiries with respect to the said imported consignment of the petitioners. On the basis of such inquiries, the Additional Director of Revenue Intelligence issued show cause notice dated 06.07.2015 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were to be accepted, the petitioners' case would be covered within the exclusion clause contained in the 3rd proviso to sub-section (1) of Section 127B of the Act. 6. In order to resolve the controversy, we may first notice the statutory provisions contained in the Act. Chapter-XIVA pertains to settlement of cases. Section 127A is a definition Section. Clause-(b) thereof defines term case as to mean any proceeding under the Act or any other Act for the levy, assessment and collection of customs duty, pending before any adjudicating authority on the date on which an application under sub-section (1) of Section 127B is made. Section 127B pertains to application for settlement of cases. Sub-section (1) thereof, which is relevant for our purpose, reads as under:- (1) Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, in respect of a case, relating to him make an application, before adjudication to the Settlement Commission to have the case settled, in such form and in such manner as may be specified by rules, and containing a full and true disclosure of his duty liability which has not been disclosed before the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining to confiscation of goods and conveyances and imposition of penalties. Section 111 contained in Chapter-XIV pertains to confiscation of improperly imported goods. Section 112 pertains to penalty for improper importation of goods. Various other Sections contained in the said Chapter pertain to confiscation and penalties under different situations of illegal or irregular imports and exports of goods. Section 122 pertains to adjudication of confiscations and penalties. Section 122A provides that adjudicating authority shall, in any proceedings under this Chapter or other provisions of the Act, give an opportunity of being heard to a party in a proceeding, if the party so desires. Section 123, which is of significance in the present case, reads as under:- 123. Burden of proof in certain cases.-(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of providing that they are not smuggled goods shall be- (a) in a case where such seizure is made from the possession of any person,- (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods, the eventualities of shifting of burden on the owner or person in possession of such goods would arise. 11. 3rd proviso to sub-section (1) of Section 127B incorporates by reference the applicability clause of Section 123. Incorporation by reference is a well known legislative technique to avoid repetition of the same set of words in different sections of the same statute or some times even in different statutes. In essence, therefore, 3rd proviso to sub-section (1) of Section 127B incorporates the applicability clause of Section 123 for the ouster of the jurisdiction of the Settlement commission. It has nothing to do with the eventuality of shifting of burden of proof. It is perhaps because of this reason that the Settlement Commission in the Special Bench judgment in case of Idris Y.Porbunderwala (supra) used the expression invocability of the provisions of Section 123 . There is nothing in the 3rd proviso to subsection (1) to Section 127B which would indicate that it envisaged satisfaction of the conditions for invoking sub-section (1) of Section 123 before the jurisdiction of the Settlement Commission can be ousted. It only refers to the goods to which Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th law. A plain reading of the provisions clearly indicates that an application under Section 127B cannot be made in respect of, inter alia, gold, which is specifically an item to which Section 123 applies. We may point out that there is no question of examining the provisions of Section 123(1) as also its applicability because that is not the context of the third proviso to Section 127B(1). The said proviso only makes a reference to the goods to which Section 123 applies and not to Section 123 itself. We have already made it clear that the goods to which Section 123 applies includes gold, as specifically indicated in Section 123 (2) of the said Act. 13. It is true that in the said case there were allegations of an attempt to smuggle gold. Nevertheless, the interpretation given by the High Court does not turn on this factual aspect. SLP against the said judgment of the Delhi High Court has also been dismissed. 14. Likewise, the Karnataka High Court in case of C.S.India (supra) had also adopted this line of reasoning observing as under:- 9. Merely because goods in question are exported under a Bill of Entry and as such 3rd proviso would be attracted only to goods imported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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