Court sets aside Final Order, remands for fresh decision under Customs Act.

The court set aside the Final Order rejecting the application for settlement under Section 127B of the Customs Act, 1962, remanding the case to the Settlement Commission for a fresh order within six months. The issue of maintainability under Section 123 was left open for the Settlement Commission to determine. The petitioner's inconsistent stance on admitted liability led to the rejection of the application. The respondent was granted thirty days to file objections, and the writ petition was disposed of with no costs.

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Issues Involved:
1. Rejection of application for settlement under Section 127B of the Customs Act, 1962.
2. Applicability of Section 123 of the Customs Act, 1962.
3. Maintainability of the application before the Settlement Commission.
4. Petitioner's inconsistent stand on admitted liability.

Detailed Analysis:

1. Rejection of Application for Settlement under Section 127B of the Customs Act, 1962:
The petitioner challenged the Final Order dated 16-7-2015, which rejected the application for settlement under Section 127B of the Customs Act, 1962. The petitioner had imported Cotton Woven Fabrics, notified under Customs Notification No. 98/2009-Cus., dated 11-9-2009. The Show Cause Notice issued questioned the declared value and classification of the imported goods, proposing a duty demand of Rs. 2,10,10,983/-. The petitioner admitted a liability of Rs. 83,27,539/- and interest of Rs. 23,82,092/-, totaling Rs. 1,07,09,631/-.

2. Applicability of Section 123 of the Customs Act, 1962:
The respondent raised a preliminary objection regarding the maintainability of the application under Section 127B, citing the 3rd proviso, which bars applications related to goods notified under Section 123. The petitioner argued that the restriction applies only if the goods are smuggled, which was not the case here. The Settlement Commission, however, rejected the application on the merits, stating that the petitioner did not come with full disclosure and a spirit of surrender.

3. Maintainability of the Application before the Settlement Commission:
The Settlement Commission referred to the decision in In Re: Idris Y. Porbunderwala, which clarified that applications are not per se barred for goods listed under Section 123 unless the goods are seized on reasonable belief of being smuggled. The Commission can determine the applicability of Section 123 based on the facts and circumstances. The petitioner's application was rejected on the ground that the issue was complex and should be adjudicated by the proper officer after appreciating the facts and evidence.

4. Petitioner's Inconsistent Stand on Admitted Liability:
Initially, the petitioner admitted liability of Rs. 83,27,539/- and interest of Rs. 23,82,092/-. However, during the hearing, the petitioner sought to reduce the amount to Rs. 77,81,844/- and interest to Rs. 15,50,791/-, requesting a refund of Rs. 15,92,037/- and interest of Rs. 8,31,301/-. This change in stance led to the rejection of the application by the Settlement Commission, as the petitioner did not provide a clear and consistent explanation.

Conclusion:
The court set aside the impugned Final Notice dated 16-7-2015 and remitted the case back to the Settlement Commission for a fresh order within six months. The maintainability issue was left open for the Settlement Commission to decide. The respondent was allowed to file objections within thirty days. The writ petition was disposed of with no cost, and connected miscellaneous petitions were closed.

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