2010 (10) TMI 726 - HC - Customs

Court affirms Settlement Commission's decision on Customs Act applications, equates gate passes to Bill of Entry

UNION OF INDIA Versus SURESH L. RAHEJA

The court upheld the Settlement Commission's decision allowing applications under Section 127(B) of the Customs Act to proceed despite the non-filing of a ... Provision u/s 127B - Import of watch and jewellery - Goods in question were affected by the deluge that took place in Mumbai on 26-7-2005 and the entire baggage was affected by floods and the watches and jewellery had also become wet on account of water seeping through baggage - Therefore, Respondents had pleaded that the applications to be proceeded with under Section 127C(1) of the said Act - The Settlement Commission in the said facts and circumstances, settled the case under Section 127C(1) of the said Act by directing payment of duty with simple interest at 10% p.a. and fine in lieu of confiscation - Held that:-considering the fact that there would be no impact on the duty recoverable from the Respondents in respect of the goods in question merely because exercise of jurisdiction by the Settlement Commission can be said to be debatable, it is not necessary for us to go into the said aspect and reach a conclusion that the order of the Settlement Commission is required to be set aside and the matter is required to be relegated back to the authorities for being dealt with in accordance with law. Issues Involved:1. Maintainability of applications under Section 127(B) of the Customs Act.2. Interpretation of Section 123 of the Customs Act.3. Applicability of Baggage Rules, 1998.4. Jurisdiction of the Settlement Commission.Issue-Wise Detailed Analysis:1. Maintainability of Applications under Section 127(B) of the Customs Act:The Petitioner challenged the maintainability of the applications under Section 127(B) of the Customs Act on the grounds that no Bill of Entry was filed. The Settlement Commission, however, found that the applicants fulfilled all conditions laid down in Section 127(B)(1) and allowed the applications to be proceeded with under Section 127(C)(1). The Commission equated the gate passes with the Bill of Entry and relied on past cases such as Mahesh Raj and Anil Prasad Nanda, concluding that non-filing of Bill of Entry for imported goods does not affect the admission of applications when filing is not contemplated by law for baggage goods.2. Interpretation of Section 123 of the Customs Act:The Petitioner argued that the Settlement Commission erred in not applying Section 123, which shifts the burden of proof to the person from whom the goods were seized. However, the Settlement Commission and the court noted that Section 123 was not mentioned in the show cause notice, and there was no dispute regarding the origin of the goods. Therefore, the contention that the Respondents failed to discharge the burden under Section 123 was found to be mis-founded.3. Applicability of Baggage Rules, 1998:The Respondents argued that the watches brought into India could be classified as personal effects under the Baggage Rules, 1998, and thus were not exigible to duty. The Settlement Commission considered the fact that the goods were used personal effects and accepted the valuation of the detained jewellery at Rs. 3,00,000/-. The Commission ordered confiscation of the seized goods but permitted their release on payment of a token fine of Rs. 1,00,000/- in lieu of confiscation, considering the damage caused by the deluge.4. Jurisdiction of the Settlement Commission:The Settlement Commission's jurisdiction to entertain baggage cases was challenged by the Revenue. The Commission relied on the Bombay High Court's judgment in Union of India v. M/s. Hoganas India Ltd., which held that the Settlement Commission has jurisdiction to deal with smuggling cases. The Commission found that the declaration made by a passenger on the disembarkation card meets the requirement of filing a declaration. The court upheld this view, stating that the Settlement Commission's finding that the Respondents fulfilled all conditions under Section 127(B)(1) was a possible view in the factual background.Consideration and Conclusion:The court noted that the Settlement Commission's order had already been implemented and the goods released. It found no necessity to go into the submissions about the Respondents' entitlement to invoke the jurisdiction of the Settlement Commission, considering the practicalities and the prolonged nature of the case. The court dismissed the writ petition, discharging the rule with no order as to costs, thereby giving a quietus to the matter.