Court upholds Settlement Commission's order, emphasizing procedural compliance over decision outcome.

The court dismissed the petition challenging the Settlement Commission's order, finding that the Commission followed a proper decision-making process in accordance with the law. The court held that the Settlement Commission's order was valid, emphasizing the importance of focusing on the decision-making process rather than the decision itself. The petitioner's arguments regarding non-compliance with disclosure requirements were not upheld, and the court found no fault with the legality of the procedure or the order. The petition was dismissed with no order as to costs, and certain directions were given regarding the bank guarantee and refund if applicable.

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Issues Involved:
1. Compliance with Section 127 B of the Customs Act, 1962.
2. Full and true disclosure by the respondent.
3. Legality of the Settlement Commission's procedure and order.

Issue-wise Detailed Analysis:

1. Compliance with Section 127 B of the Customs Act, 1962:
The petitioner argued that Section 127 B(1) of the Customs Act mandates that any importer may make an application to the Settlement Commission before adjudication to have the case settled. This application must contain a full and true disclosure of the duty liability, the manner in which such liability was incurred, the additional amount of customs duty accepted to be payable, and other specified particulars. The petitioner contended that the respondent's disclosure was neither full nor true, thereby failing to comply with the mandatory conditions of Section 127 B.

2. Full and True Disclosure by the Respondent:
The petitioner highlighted that the respondent initially accepted a duty liability of Rs.16,03,948/- against a demand of Rs.36,32,032/- as per the show cause notice. This liability was revised multiple times, indicating that the respondent failed to disclose the correct transaction value at which the goods were procured. The petitioner also pointed out that the respondent continued with dishonesty even before the Settlement Commission by making references to other cases, which should not have been made, thus failing to comply with the condition precedent for making an application to the Settlement Commission.

3. Legality of the Settlement Commission's Procedure and Order:
The court noted that it is not a court of appeal while exercising its jurisdiction under Article 226 of the Constitution of India against the order of the Settlement Commission. The court's role is to examine the legality of the procedure followed, not the validity of the order. The court referred to the precedent set in Santogen Textile Mills vs. Union of India, where it was established that the writ court should focus on the decision-making process rather than the decision itself.

The court observed that the Settlement Commission had asked the respondent to make a true disclosure regarding the price actually paid for the goods and reminded the respondent of its obligation to pay the admitted duty liability with interest before the case was taken up for further disposal. However, the final order dated 12th September 2011, which is impugned in this petition, did not reference any failure on the part of the respondent to make full and true disclosure. The minority view in the final order differed only on the valuation of the imported goods and the resultant customs duty payable, not on the respondent's conduct.

The court concluded that the Settlement Commission adopted a proper decision-making process in accordance with the law. The court found no fault with the legality of the procedure or the validity of the order of the Settlement Commission.

Conclusion:
The petition was dismissed with no order as to costs. The bank guarantee submitted by the petitioner pursuant to the order dated 31st July 2012 was to be canceled and returned within six weeks of receiving an application. If the bank guarantee had been encashed, the respondent was directed to refund the encashment amount within six weeks of receiving an application, together with applicable interest, in accordance with the law.

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