2019 (11) TMI 390 - HC - Customs

Admission Order upheld despite quashing, final order remains valid. Writ petition dismissed.

The Delhi High Court dismissed the writ petition challenging an Admission Order and transfer of the case by the Settlement Commission. The court held that ... Suppression of actual transaction value - misdeclaration of the actual description of goods - Import of Zinc Ash, Zinc Skimming and Zinc Dross from US, Canada and Dubai and other countries from 2002 to 2006 - Section 127B of the Customs Act, 1962 - jurisdiction and authority to transfer the case to Additional Bench, Mumbai. HELD THAT:- A subjective satisfaction was arrived at by the Settlement Commission as stated in paragraph 6 of the order passed under Section 127C by the Settlement Commission of the admission of an application preferred under Section 127B of the Customs Act. Moreover, by now final order has also been passed by the Settlement Commission under Section 127D of the Customs Act. The final order has not yet been challenged by the Union of India meaning thereby to the final order passed by the Settlement Commission remain intact and as it is. We are not quashing and setting aside the order of admission passed by the Settlement Commission for the reasons as stated hereinabove. Moreover, there is nothing like “automatic cancellation of the order under Section 127D of the Customs Act”. It ought to be kept in mind that unless the final order is challenged by the Union of India passed by the Settlement Commission under Section 127D, such order remain intact and as it is. Thus, there is no separate existence of the order under Section 127C and a final order under Section 127D of the Customs Act is already passed and that too the said order remains valid from 29th February, 2008 onwards because the final order under Section 127D was passed more than a decade ago and the same has not been quashed and set aside by any competent court because there exists no challenge to the final order of the Settlement Commission - petition dismissed. Issues:Challenge to Admission Order and Transfer Order by Directorate of Revenue Intelligence before the Delhi High Court.Analysis:The Directorate of Revenue Intelligence filed a writ petition challenging an Admission Order and a transfer of the case to a different bench by the Settlement Commission. The case involved allegations of misdeclaration and undervaluation of imported goods. The respondent imported Zinc Ash, Zinc Skimming, and Zinc Dross from various countries. Show cause notices were issued, and the transactions took place in Mumbai and Udaipur. The respondent applied for settlement in Delhi, but the case was transferred to Mumbai by the Chairman, Principal Bench.The Settlement Commission passed an admission order in favor of the respondent, stating that there was a full and true disclosure. A final order was also issued by the Settlement Commission. The Union of India did not challenge the final order. The petitioner argued that quashing the admission order would automatically cancel the final order, but the court disagreed. The court cited legal principles stating that an order remains valid until challenged in a competent forum.The petitioner contended that a court order prevented giving effect to the final order, but the court clarified that the final order was not immune to challenge. The admission order merged with the final order, rendering it non-existent. As the final order was not challenged or quashed, it remained valid. The court dismissed the writ petition, stating there was no reason to entertain it. The case was disposed of with these observations. An application related to the case was also disposed of in view of the final order in another matter.