9911796707
TMI Blog2003 (5) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... n were filed from time to time and the same were assessed under Section 46 read with Section 14(1) of the Act. 4.It appears that some investigations were undertaken against the petitioner by the Director General, Directorate of Revenue Intelligence, respondent No. 4 herein. On 14 July, 1997 summons under Section 108 of the Act were issued to the Director of the petitioner-company requiring him to appear before the Sr. Intelligence Officer and produce Bills of Entry, Invoices, Bills of Lading, Airway Bills of imports from the said Wellgain Products with effect from 1 January, 1997 along with Balance Sheets, Profit Loss Accounts for the period 1994-95 to 1998-99. Pursuant thereto the Bills of Entry pertaining to the period 1 January, 1999 and Balance Sheets etc. for the period 1994-95 to 1997-98 were produced. On 20 September, 1997 the premises of the petitioner were searched by the officers of the Directorate of Revenue Intelligence (for short 'DRI'), which resulted in the seizure of certain records. During the course of investigations statements of the Joint Director of the petitioner were recorded. It is alleged that a sum of Rs. 1 crore towards duty/interest/penalty were depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted a duty liability of Rs. 48,52,382.01. 7.The application was resisted by the Revenue, inter alia, on the ground that it had been filed by the petitioner with a view to stall investigations; it was premature and though the DRI has not issued a show cause notice in the case, their investigations in respect of 36 consignments has revealed that the applicant had evaded customs duty of approximately Rs. 1.14 crores and, therefore, the disclosure made by the applicant for Rs. 48,52,382.01 was not full and true. 8.Rejecting the objection raised by the Revenue, vide order dated 26 November, 2001, the Commission allowed the application to be proceeded with under Section 127C(1) of the Act. Dealing with the objection of the Revenue that the disclosure in the application was not true and complete, the Commission observed that the application has been made on the basis of the material available with the petitioner, which has been provided in a sealed cover to the Commission in terms of the Customs and Central Excise Settlement Commission Procedure, 1999 read with Rule 4 of the Customs (Settlement of Cases) Rules, 1999 and the said information shall be considered by the Board after pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect to the duty demand on 36 consignments besides imposing a penalty of Rs. 40 lakhs on the petitioner. 11.Aggrieved by the said order, the petitioner has filed the present writ petition. 12.The order is challenged mainly on the ground that since the application under Section 127B of the Act related to 28 consignments, only in respect of which the petitioner had information from the supplier that there were contrary declarations by the aforenoted party in Hong Kong and based on the said information the petitioner had accepted its vicarious liability in respect of 28 shipments, the Commission did not have the jurisdiction to deal with other consignments, in respect whereof three show cause notices had been issued. 13.The petition is resisted by the respondents. In the affidavit-in-opposition, it is pleaded that the petitioner had approached the Commission for settlement of the case and had forwarded a list of 172 Bills of Entry for the goods imported by them during the period 1 March, 1997 to 31 August, 1999; in the show cause notices it had been clearly stated that the under valuation resorted to by the petitioner in respect of 36 consignments had been applied in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no evidence with the Commission of undervaluation in respect of 71 Bills of Entry, for which additional duty has been clamped on the petitioner. Learned Counsel has also contended that the order of the Commission suffers from a procedural irregularity inasmuch as the Commission had called for report under Section 127C(6) from the DRI and not from the Commissioner concerned. Residually, it was submitted that the Commission has also erred in not granting relief of Modvat Credit against the additional customs duty demanded. 16.Per contra, Mr. Jayant Bhushan, learned Senior Counsel for the Revenue, while supporting the conclusion of the Commission, has submitted that once the petitioner had approached the Commission for settlement of its demand for the period from 1 January, 1997 to 31 August, 1999 (Column 5 of the application), the number of consignments received during the period is irrelevant. Laying emphasis on the prayers made by the petitioner in their application, it is urged that having prayed for stay of all the investigations undertaken by the DRI in respect of all the imports during the afore noted period and grant of immunity from prosecution, payment of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of such dutiable goods in respect of which he admits short levy on account of misclassification or otherwise of goods. 19.The term 'cast' has been defined in Clause (a) of Section 127A of the Act, to mean any proceeding under the Act for the levy, assessment and collection of Customs duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before the proper officer or the Central Government on the duty on which an application under sub-section (1) of Section 127B is made. 20.Section 127C sets out the procedure for dealing with the application received under Section 127B. For the sake of convenience, the section, insofar as it is relevant for our purpose, is reproduced below : "127C. Procedure on receipt of application under Section 127B. - (1) On receipt of an application under Section 127B, the Settlement Commission shall call for a report from the Commissioner of Customs having jurisdiction and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (6)." 21.Sub-section (7) of Section 127C of the Act provides that after examining the entire record and the report of the Commissioner of Customs, the Commission shall "pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Customs or the Commissioner (Investigation)", in accordance with the provisions of the Act. In other words, the Commission is not only required to act in accordance with the provisions of the Act, its jurisdiction is also confined to the matters covered by the application before it. The words "other matter relating to the case not covered by the application but referred to in the report of the Commissioner" show that the Commission is empowered to take into consideration any other material not covered by the application but it is imperative that it must be one relating to the case before the Commission and is referred to in the report of the Commissioner. 22.The expression "other matter relating to the case not covered by the application" also appears in Section 245D(1) of the Income-tax Act, 1961. The said pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the case before the Commission cannot be satisfactorily settled unless some previously concluded proceedings are reopened, which would normally be to the prejudice of the assessee. It is precisely for this reason that the section says that it can be done only with the concurrence of the applicant. 26.As noticed above the grievance of the petitioner in the present case is that without its concurrence the Commission was not competent to bring within the ambit of "case" before it 71 additional Bills of Entry because its application before the Commission was for settlement of "case" pertaining to 28 consignments in the first instance but later on consenting to the inclusion of 8 more consignments. Though on the first blush the argument of the petitioner appears to be attractive because undoubtedly the Commission cannot make the order under the said provision without the concurrence of the applicant, otherwise it would be in conflict with the mandatory provision of the section, but having closely examined the contents of the application filed by the petitioner under Section 127B of the Act and the Annexure thereto, we do not find much substance in it. We have no hesitation in holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived : Rs. 48,52,382.01" 28.It would also be relevant to notice the details of the worksheet and the note appended thereto forming part of the afore-extracted Annexure. It reads as follows : "WORKSHEET Imports during 1-1-97 to 31-8-99 : (a) FOB value of all imports : Rs. 9,55,35,321.54 (b) Assessable Value : Rs. 10,88,76,755.62 (c) Basic Customs Duty : Rs. 3,10,35,187.03 (d) Additional Duty of Customs : Rs. 1,28,84,139.11 (e) FOB value of 28 Bills of Entry in respect of which there is discrepancy between declared value and the value declared on the export documents. : Rs. 1,98,79,804.26 (f) Actual freight as per B/L for 28 B's/E : Rs. 11,57,943.70 (g) Insurance at 1.125% for 28 B's/E : Rs. 1,67,727.10 (h) Landing charges for 28 B's/E : Rs. 2,12,068.36 (i) Assessable Value (28 B's/E) : Rs. 2,14,17,542.12 (j) Basic Customs duty as at the rates indicated on the B/E for 28 B's/E : Rs. 73,04,283.99 (k) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, etc. Therefore, unless issue of summons and search and seizure operations are construed as "proceedings under the Act for the levy, assessment and collection of customs duty" within the meaning of Clause (a) of Section 127A of the Act, there was no "case" pending in respect of any of the imports during the afore-noted period and the petitioner's application for settlement was premature, as was sought to be pleaded by the Revenue. But the said objection having been over-ruled by the Commission, the petitioner cannot now be heard to say that the case related to each of the Bills of Entry individually and not to the period for which investigations had been started by the Revenue. The investigations ultimately culminated in the issue of aforementioned three show cause notices. Taking note of the said show cause notices, vide order dated 16 January, 2002, on petitioner's application, the Commission had stayed further investigations in the case and had directed the Revenue to furnish particulars in the form of tabular statement, Bills of Entry, showing the invoiced value as declared in the Bill of Entry; the ascertained value during investigations and document on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Furthermore, it is not within the scope of our power of judicial review to go into the validity of the said determination, particularly when under Section 127J of the Act every order of settlement passed under sub-section (7) of Section 127C shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in the Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force. What is required to be seen is whether the order of Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner. This Court is concerned with the illegality of the procedure followed and not the validity of the order. In other words, the judicial review is concerned not with the decision but with the decision making process [See : Jyotendrasinhji v. S.I. Tripathi Ors. (1993) Suppl. 3 SCC 389 : R.B. Shreeram Durga Prasad v. Settlement Commission Anr., (1989) 176 ITR 169]. Having come to the conclusion that the order passed by the Commission is in consonance with the provisions of the Act, there is no ground to interfere with the impugned determination of tax li ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
