2001 (6) TMI 227 - Commission - Customs

Settlement Commission grants relief in duty mis-declaration case at Bangalore Airport

The Settlement Commission allowed the applicant's application for settlement of a case involving mis-declaration of goods at Bangalore International ... Admissibility of settlement application under Section 127B/127C of the Customs Act - Declaration for baggage goods under Section 77 vis-a-vis Bill of Entry requirement under Section 46 - Importer definition and standing of any person to apply - Verification of admitted duty liability not fatal to admission - Adjustment of admitted duty from sale proceeds under Section 150(2)(c) - Exclusive jurisdiction of the Settlement Commission under Section 127F(2)Declaration for baggage goods under Section 77 vis-a-vis Bill of Entry requirement under Section 46 - Non-filing of Bill of Entry does not defeat admission where goods are baggage and the law contemplates declaration under Section 77 rather than a Bill of Entry under Section 46. - HELD THAT: - The Court observed that clause (a) of the first proviso to sub-section (1) of Section 127B requires filing of a Bill of Entry in respect of imported goods where such filing is contemplated by law. For baggage goods the corresponding provision is Section 77, not Section 46, and filing of a Bill of Entry is not envisaged. The applicant had made an oral declaration before the proper officer and a written declaration in the disembarkation card, facts recorded in the SCN. Consequently, absence of a formal Bill of Entry could not be held to bar admission of the settlement application. [Paras 5]Application not rendered inadmissible by absence of Bill of Entry where baggage provisions apply.Importer definition and standing of any person to apply - An application under Section 127B(1) may be made by any person making full and true disclosure of duty liability; the applicant need not be the importer in strict ownership terms. - HELD THAT: - The Court relied on the statutory definition which treats 'importer' as including any owner or any person holding himself out to be the importer between importation and clearance for home consumption. Therefore the Settlement Commission's scheme contemplates applicants who may not be the formal importer but who admit duty liability and seek settlement. [Paras 6]Applicant's standing to file for settlement is acceptable though not the importer in ownership sense.Verification of admitted duty liability not fatal to admission - Verification of the precise duty liability is not a bar to admitting the settlement application; discrepancies can be tested at final hearing and affect immunities accordingly. - HELD THAT: - The Court noted that the Revenue could determine the exact duty payable once full details were available, but lack of such verification cannot by itself prevent admission of the application. If at final hearing the Revenue demonstrates that the additional duty offered is not full and true, that finding will influence the relief or immunities granted by the Commission. [Paras 7]Admission may proceed despite pending verification of duty; substantive correctness to be examined at final hearing.Adjustment of admitted duty from sale proceeds under Section 150(2)(c) - The admitted duty amount shall be adjusted from the sale proceeds realised by the Revenue in terms of clause (c) of sub-section (2) of Section 150 of the Customs Act. - HELD THAT: - The Court accepted the Advocate's submission that the goods had been sold by the Revenue and sale proceeds realised; accordingly, on admission the Commission directed that the admitted liability be adjusted from those proceeds in accordance with the statutory provision governing application of sale proceeds towards liabilities. The Court recorded the respondent's obligation to report after making the necessary adjustment. [Paras 3, 10]Admitted amount to be adjusted from sale proceeds and respondent to report adjustments.Admissibility of settlement application under Section 127B/127C of the Customs Act - Exclusive jurisdiction of the Settlement Commission under Section 127F(2) - The application satisfied conditions of Section 127B and is admitted to proceed under sub-section (1) of Section 127C; upon admission the Settlement Commission acquires exclusive jurisdiction under Section 127F(2). - HELD THAT: - Having found that the prerequisites for admission were met (including that the goods were not prohibited and relevant declarations were made), the Court allowed the application to be proceeded with under the settlement provisions. The Court further clarified that, by operation of sub-section (2) of Section 127F, the Commission on admission acquires exclusive jurisdiction to exercise powers and functions of any customs officer under the Act in relation to the matter, and all concerned must act accordingly. [Paras 8, 10, 11]Application admitted for settlement; Settlement Commission vested with exclusive jurisdiction to determine the matter.Final Conclusion: The Settlement Commission admitted the application for settlement under the Customs Act, holding that absence of a Bill of Entry is not fatal where baggage provisions apply, the applicant may apply though not the formal importer, verification of duty does not preclude admission, the admitted duty is to be adjusted from sale proceeds, and the Commission on admission acquires exclusive jurisdiction to determine the matter. Issues:Application for settlement of a case pending adjudication; Non-filing of Bill of Entry as objection for admission of application; Full disclosure of duty liability; Ownership of goods by importer; Verification of duty liability; Acceptance of determined value by applicant; Redemption of goods; Sanction for prosecution; Settlement Machinery jurisdiction.Analysis:The applicant filed an application for settlement of a case pending adjudication concerning mis-declaration of goods upon arrival at the Bangalore International Airport. The Customs officer assessed the value of the goods to be higher than declared, leading to detailed examination and subsequent arrest of the applicant under the COFEPOSA Act of 1974. The application satisfied the conditions under Section 127B of the Customs Act, 1962, despite objections from the respondent Commissioner regarding the non-filing of a Bill of Entry. The Advocate argued that the oral and written declarations made by the applicant fulfilled the necessary requirements, and the duty amount was offered in accordance with relevant customs regulations.The Revenue did not appear at the hearing, but sent a report objecting to the admission of the application based on the non-filing of a Bill of Entry. The Settlement Commission noted that for baggage goods, the requirement of filing a Bill of Entry, as per Section 46, did not apply, and the application could proceed without it. The Commission agreed with the Advocate that any person, not just the importer or exporter, could disclose duty liability under Section 127B(1) of the Customs Act, 1962. The Commission emphasized that the applicant's admission of the determined value and duty liability was crucial for the settlement process.Despite objections raised by the Revenue, the Commission allowed the application to proceed, as the conditions of Section 127B were met. The Commission directed the adjustment of the admitted amount from the sale proceeds of the goods. The exclusive jurisdiction of the Settlement Commission under Section 127F of the Customs Act, 1962 was invoked upon admission of the application, granting the Commission the authority to handle the case and make necessary decisions. The Commission highlighted the purpose of the Settlement Machinery as providing a chance for tax-evaders to rectify their actions, in line with the Wanchoo Committee recommendations.