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TMI Blog2004 (1) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ign Trade, Ahmedabad entitling the petitioners to import 2,62,500 Kgs. of chips and other inputs. The export obligation of the petitioners against the above import was prescribed under the said licence at 2,50,000 Kgs. of yarn valuing US$ 3,12,500. The petitioners thereafter imported the chips under the above licence and filed Bill of Entry dated 14/15-9-1998 for clearance of the imported goods for home consumption. The petitioners showed additional customs duty (CVD) as payable whereas the basic customs duty and special additional duty (SAD) were shown as Nil in the Bill of Entry for the goods imported and cleared for home consumption. It is case of the petitioners that after the above import took place in the year 1998 and immediately after the inputs were removed for home consumption, international prices of yarns became very volatile. As a result of various developments that took place in various countries, mainly South East Asian countries and also countries like China and Taiwan, imported polyester yarn became very cheap to such an extent that the yarns sold by the manufacturers located in countries like China and Taiwan became cheaper than even the price at which the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2(34) of the Customs Act, 1961 and that the Officers of the Director General of Foreign Trade are not proper officers for the purposes of the Customs Act. Hence, the demand notices issued by the Office of the Director General of Foreign Trade cannot be said to satisfy the provisions of Section 127B(1)(a) of the Customs Act. The Settlement Commission accordingly sent the cases back to the Revenue to dispose of the cases in accordance with the Customs Act as if no application under Section 127B had been made by the petitioners. The said orders of the Settlement Commission are challenged in the present petition. 4.Mr. Paresh M. Dave, learned counsel for the petitioners has submitted that the Settlement Commission has erred in refusing to exercise the jurisdiction vested in it by giving erroneous finding that the letters dated 14-2-2001 written by the Deputy Commissioner of Customs calling upon the Bank for encashment of the bank guarantees were not show cause notices or demand notices issued by the Proper Officer under the Customs Act. Mr. Dave has also submitted that in any view of the matter, the applications under Section 127B can be made for settlement of any proceeding und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action initiated by the Joint Director General of Foreign Trade under the aforesaid provisions is independent and separate from the action initiated by the Deputy Commissioner of Customs under the provisions of the Customs Act. Hence, such cases cannot be taken up by the Settlement Commission since their jurisdiction is in respect of matters where the importer has not made a full and proper disclosure of his duty liability before the Proper Officer. Mr. Patel has, therefore, submitted that since no show cause notice was issued to the petitioners by the Customs Department, the applications filed before the Settlement Commission were not maintainable under Section 127B(1)(B)(a) of the Customs Act. 6.Before considering the rival submissions, it is necessary to refer to the relevant statutory provisions. Chapter XVIA of the Customs Act begins with the heading "Settlement of Cases". Section 127A contains definitions including definitions of "case" and "Settlement Commission" which are as under :- Definitions. -"Section 127A. In this Chapter, unless the context otherwise requires, - "case" means any proceeding under this Act or any other Act for the levy, assessment and collectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er V of the Central Excise Act and Chapter XIVA of the Customs Act. Section 31(c) of the Central Excise Act also defines "case" in the same terms as Section 127A(b) of the Customs Act i.e. any proceeding under the Excise Act or any other Act for the levy, assessment and collection of excise duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before a Central Excise Officer or Central Government on the date on which an application under sub-section (1) of Section 32E is made. It is thus clear that for an application before the Settlement Commission under Section 127B to be competent, it is not necessary that the proceeding must be under the Customs Act. The definition of "case" expressly includes "any proceeding under any other Act" if such proceeding is for levy, assessment and collection of duty. It is true that the demand notices dated 12-10-2001 are issued by the Foreign Trade Development Officer for Joint Director General of Foreign Trade and they also call upon the petitioners to explain why the petitioners should not be declared as defaulter thereby disentitling the petitioners to secure any lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has imported any material for the purpose of manufacturing goods ultimately to be exported, customs duty would not be payable if the imported raw materials are used in manufacturing finished products which are exported. 8.It is in view of the aforesaid statutory provisions and the conditions of the licence that the Joint Director General of Foreign Trade issued the demand notices dated 12-10-2001 advising the petitioners to pay to the Customs Department customs duty on the unutilized imported materials along with interest thereon. If the Joint Director General of Foreign Trade is not treated as the proper officer for the levy, assessment and collection of customs duty and if the letters dated 14-2-2001 (Annexure "B" colly.) written by the Deputy Commissioner of Customs calling upon the Bank for encashment of the bank guarantee are not treated as show cause notices or demand notices from the proper officer for the purpose of levy, assessment and collection of customs duty, there would be no outstanding demand from the Customs department to the petitioner, which is not the case of the respondent authorities. The term "proper officer" has to be read in conjunction with the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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