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TMI Blog2015 (8) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... ses relating to goods which are specified/notified under sub-section (2) of Section 123 of the Customs Act, 1962 are outside the purview of Settlement Commission. Accordingly, as the goods to which the instant case relates are notified under sub-section (2) of Section 123 of the Customs Act, 1962 and also so admitted by the applicants during the hearing on 24-7-2015, the Bench rejects the application for settlement filed by the appellant. - Settlement application rejected as non-jurisdictional - Settlement Application No. 1062/2015 in File No. C-504/CUS/2015-SC(KB) - Final Order No. F-460/CUS/2015-SC(KB)-Rej. - Dated:- 7-8-2015 - Shri Karan K. Sharma, Vice-Chairman and C. Dube, Member Shri Ashish Batra, Advocate, for the Assessee. Shri Abhijit Bhattacharya, Asstt. Commissioner (in-situ) and Siddhartha Chakrabarti, SIO, for the Department. ORDER This order disposes of Settlement Application No. 1062/2015 filed by Shri Rahul Ahuja, Propreitor, M/s. Multitrade Oveaseas, 819, 8th Floor, Devika Tower, Nehru Place, New Delhi - 110 019 (hereinafter referred to as the applicant ) under Section 127B of the Customs Act, 1962 (in short the Act ). This application has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of the applicant at E-259, Front Portion, Greater Kailash, Part-I, New Delhi - 110048 was searched on 30-8-2012 and some documents related to import of the above-mentioned consignments were recovered and seized under the Act. 2.3 In his statement dated 30-8-2012, the applicant admitted the fact of purchasing the four consignments from the said importers and clearing of the same without payment of duty against the said licences and not having factory at the address declared to DGFT and inter alia stated that the said four duty free consignments were sent to the factory premises of M/s. K.R. Industries, Bodai Panchyat Road, P.O. Jugberia, Dist. North 24 Parganas, Kolkata - 700110, not declared in the said licences, that no export against the above imports had been effected. 2.4 In his statement dated 30-8-2012, the applicant admitted his reponsibility for diversion of duty free imported goods under Advance Licence and inter alia stated that since the duty free goods were sold in the local market violating the condition of Advance Licence Scheme and he was not in a position to fulfil the export obligation, he had decided to pay the full duty foregone in connection with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the admitted amount of duty. 4.1 As detailed above the applicant during investigation has voluntarily deposited ₹ 20,00,000/-. Later on the applicant deposited ₹ 19,50,000/- vide Demand Draft No. 415887, dated 5-1-2015 ₹ 8,50,000/- vide Demand Draft No. 413666, dated 29-1-2015 before approaching the Commission. For balance amount of ₹ 2,483/-, the applicant deposited ₹ 2,500/- through Demand Draft No. 942923, dated 16-2-2015. 4.2 While admitting the additional liability towards duty in excess of ₹ 3 lac, the applicant prayed for allowing the case to be proceeded with and settled granting immunities from penalty and prosecution for true and full disclosure and full cooperation. 5. Notice under Section 127C(1) of the Act was issued on 11-2-2015. 5.1 On 19-2-2015, the applicant was, inter alia, asked to clarify - As per the subject show cause notice, the goods (Polyester knitted Fabric) for which Customs duty has apparently been evaded, appears to attract the provisions of Section 123 of Customs Act, 1962. Hence, as per the proviso of Section 127B(1) ibid, the applicant do not appear to be eligible for approaching the Settlemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Zonal Unit and the jurisdictional Commissioner for comments on 16-3-2015. 5.4 Deputy Director, DRI vide his letter dated 23/24-3-2015 has inter alia stated that - In the import documents the goods have been declared as Polyester Knitted Fabric under CTH 6006 32 00 wherefrom it appears that the goods will come under the purview of the Notification No. 204-Cus., dated 20-7-1984 and ....the goods were imported under four bills of entry filed before the Customs and were cleared availing the benefit of Notification No. 96/2009-Cus., dated 11-9-2009. After Customs clearance, the importer failed to comply with the conditions of the said notification dated 11-9-2009, which made the entire goods liable for confiscation under the Customs Act. Out of total 2,80,097 Mtr. of imported goods, a small part (1200 Mtr) was recovered during investigation and seized under Customs Act . 5.5 The jurisdictional Commissioner vide his letter dated 22-5-2015 has informed that the applicant has deposited ₹ 48,00,000/- and the department has calculated the amount of interest liable to be paid by the applicant as ₹ 11,78,171/- and the total liability of Customs duty and interest of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olkata, and Shri Siddhartha Chakrabarti, SIO, DRI, KZU, Kolkata. Shri Siddhartha Chakrabarti, SIO, DRI, KZU, Kolkata, submitted that it was a case of pre-planned smuggling of goods and that the factory where the imported goods were to be deposited was not in existence. 9.2 Shri Abhijit Bhattacharya, Asstt. Commr. (in-situ), Commissionerate of Customs (Port), Customs House, Kolkata, stated that the applicant has deposited ₹ 48 lakhs and ₹ 2,500/- so far. The balance amount of ₹ 3,16,857/- has not been deposited so far. Both Shri Abhijit Bhattacharya, Asstt. Commr. (in-situ), Commissionerate of Customs (Port), Kolkata, and Shri Siddhartha Chakrabarti, SIO, DRI, KZU, Kolkata, submitted that since this is a case of pre-planned smuggling of goods, no immunity from penalty should be granted. 9.3 The Bench has examined the contentions of Shri Ashish Batra, advocate, appearing on behalf of the applicant. The first contention of Shri Batra is that the SCN has not invoked the provisions of Section 123 of the Customs Act, 1962. Shri Ashish Batra, advocate, appearing on behalf of the applicant has categorically stated during the hearing on 24-7-2015 that the goods to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in sub-section (2) of Section 123 are seized. This burden of proof is invoked if the three conditions, namely, the goods are notified under sub-section (2) of Section 123; the goods have been seized and seized under the reasonable belief that they are smuggled, are fulfilled. 9.6 All these conditions covering both the goods and the circumstances under which the goods are seized have to be fulfilled in totality for the burden of proof to lie on the person from whose possession the goods are seized. 10. Numerous judgments of the Hon ble Supreme Court of India and the Hon ble High Courts cited by the Special Bench in the case of Idris Y. Porbunderwala confirm this position. 11. Thus, it is clear that so far as the fastening the burden to prove that the goods are not smuggled is concerned, all three conditions under Section 123, discussed above, have to be fulfilled in unison. However, as far as the bar under the third proviso to sub-section (1) of Section 127B is concerned, it just requires the goods to be notified under Section 123(2) of Customs Act, 1962. For the bar under the third proviso to sub-section (1) of Section 127B of Customs Act to be applicable, the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of Section 127B which only lays down that the cases in relation to goods to which Section 123 applies are outside the purview of Settlement Commission. Assigning additional meaning to goods by incorporating the circumstances under which the goods are seized shall alter the scope and dilute the restrictions imposed by the statutory provisions. This is supported by the observations of the Constitution Bench of five judges of the Hon ble Supreme Court in R.S. Nayak v. A.R. Antulay, AIR 1984 SC 684 : if the words of the Statute are clear and unambiguous, it is the plainest duly of the Court to give effect to the natural meaning of the words used in the provision. The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the Statute would be self-defeating. (para 18). Hon ble Supreme Court has again in Union of India v. Ind-Swift Laboratories has held : A taxing statute must he interpreted in the light of what is clearly expressed. It is not permissible to import provisions in a taxing statute so as to supply any assumed deficiency.... 2011 (265) E.L.T. 3 (S.C.) = 2012 (25) S.T.R. 184 (S.C.). Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sea Customs Act, 1878, through amendment by Section 14 of Act 21 of 1955 by incorporating Section 178A in the Sea Customs Act, following recommendations of the Taxation Inquiry Commission s Report, The Taxation Inquiry Committee had recommended to make smuggling a criminal offence and to transfer the onus of proof in respect of offences relating to smuggling to the person in whose possession any dutiable, restricted or prohibited goods were found. Section 178A of the Sea Customs Act, 1878, read as under : - 178A. (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 proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. (2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf. (3) Every notification issued under sub-section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued. 18. Exactly, the same provisions ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court of Karnataka at Bangalore in the case of Commissioner of Customs, Bangalore v. A. Mahesh Raj, reported in 2006 (195) E.L.T. 261 (Kar.), has upheld the bar imposed by Section 127B of the Customs Act, 1962. (Para - 21). 23.1 The Hon ble High Court of Judicature at Madras in the case of V.C. Mohan v. Commissioner of Customs (AIR), Chennai-I, reported in 2008 (222) E.L.T. 344 (Mad.), has also examined in detail the conditions laid down by Section 127B of the Customs Act, 1962. Having considered all the conditions laid down in Section 127B and nothing that the same had been fulfilled, the Hon ble High Court observed that even the cases in which fraud or smuggling or deliberate misdeclaration has been alleged against the importer can very well come within the purview of Section 127B for the purpose of settlement of cases, if the conditions stated are satisfied. (Para -21) 23.2 The Hon ble High Court of Judicature at Madras in the case of Optigrab International v. Government of India, reported in 2010 (253) E.L.T. 722 (Mad.), has observed that Chapter XIVA of the Customs Act, being an exemption to the normal procedure contemplated under the Act and occurring in a fisca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be complied with, albeit because of statutory disability - even assuming the petitioner is right in its contention that there is a statutory disability in calculating the interest due under Section 28AB - the result would be that such a case was not intended to be covered by the section; it is not open to the petitioner to argue that because of the statutory disability (whatever that may be) one of those conditions cannot be complied with but yet the petitioner should be permitted to approach the Settlement Commission. As already pointed out, an assessee is permitted to approach the Settlement Commission subject to inviolable conditions, the proper and complete compliance with which cannot be compromised or condoned in any manner. Even on this score, the petitioner has to fail. Having expressed this view of the matter, the Court clarifies this judgment leaves open the parties contentions on other grounds, including the applicability of Section 123 of the Act, by way of the third proviso to Section 127B, which may be considered by the Settlement Commission, if advanced by the patties, in accordance with law. (Paras - 20 21). 23.7 Thus, it is apparent that subsequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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