2015 (12) TMI 319 - HC - Customs

Court Upholds Settlement Commission's Final Order on Import Violations for Christmas Lights

Directorate Of Revenue Intelligence & Anr. Versus M.I. Enterprises & Ors.

The Court upheld the final order issued by the Settlement Commission concerning import violations of Christmas Lights, LED Bulbs, and Decoration Lamps. ... Validity of order of settlement commission - Assessee made importation contrary to the provisions of Customs Act, 1962 as also the Foreign Trade Development & Regulation Act, 1992 - misuse of IEC Code - Held that:- Satish Aggarwala appearing for the petitioner/Directorate of Revenue Intelligence contends that the Settlement Commission has taken a very lenient view in imposing the fines and penalties. According to him, in a case of this nature, the fines should have been much higher as also the penalty amount. We have also heard the learned counsel for the respondents - It is well settled that the proceedings before the Settlement Commission are not adjudicatory but are by way of settlement. This Court does not sit in appeal over the settlement orders passed by the Settlement Commission. It is, therefore, not open to a party to make a grievance with regard to an adjudicatory process when the same is foreign to the proceedings before the Settlement Commission. - Decided against Revenue. Issues:1. Challenge against the final order issued by the Customs and Central Excise Settlement Commission regarding import violations.2. Misuse of IE Code and undervaluation of imported goods.3. Settlement terms including assessable value, customs duty, fine, penalty, and immunities granted.4. Disagreement over the leniency of fines and penalties imposed by the Settlement Commission.5. Jurisdiction of the Court to interfere with settlement orders.Analysis:1. The writ petition challenged the final order issued by the Settlement Commission concerning import violations related to Christmas Lights, LED Bulbs, and Decoration Lamps. Allegations included contravention of the Customs Act, 1962, and the Foreign Trade Development & Regulation Act, 1992, along with misuse of the IE Code. A common show cause notice was issued by the Revenue Intelligence Directorate.2. The Settlement Commission allowed the settlement applications to proceed, leading to the final order. The Commission found the applicants made true disclosures, cooperated, and paid the duty demanded. The imported goods, although prohibited, could be released based on redemption fine under Section 125 of the Customs Act. The Commission determined the assessable value, customs duty, fine, and penalties for the applicants and co-applicants involved in the import violations.3. The settlement terms included re-determination of assessable value, settlement of customs duty, imposition of fines, and penalties. Immunities were granted from prosecution under specific provisions. The order specified conditions for returning seized goods and warned of consequences if false information was provided.4. The petitioner contended that the fines and penalties imposed were lenient, advocating for higher amounts. However, the Court emphasized that Settlement Commission proceedings are not adjudicatory but for settlement purposes. The Court clarified that it cannot interfere with settlement orders, as they are beyond its appellate jurisdiction.5. Consequently, the Court dismissed the writ petition, highlighting that no interference with the impugned order was warranted. No costs were awarded in the matter. The judgment upheld the Settlement Commission's decision, emphasizing the non-adjudicatory nature of settlement proceedings and the limited scope for judicial intervention.