TaxTMI 
TaxTMI 
2009 (8) TMI 212
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....from imposition of any fine and penalty, (5) immunity from prosecution and (6) permission to pay C.V.D. Separately. 3. The application was fixed for admission on 10-5-2000. The Petitioner submitted that there was error in calculation of actual amount of duty payable and considering the export obligation performed, the obligation for payment of duty would be Rs. 1,16,49,093/-. Respondent No. 3 on 8-5-2000 submitted report as required under Section 127-C(1) of the Customs Act, 1962 on the application filed by the Petitioner. The report sated that the application filed by the Petitioner was liable to be rejected under Section 127C, since it did not disclose any new duty liability which was not known earlier. It was also sated that the Petitioners request for the waiver of interest was not acceptable and further the Act did not allow any power on the Commissioner of Customs to allow payment of duty in installments. The report did not include any demand by way of penalty. By an order dated 8-6-2000 the respondent No. 2 allowed the application filed by the Petitioner, to be proceeded with and directed the Petitioner to pay Rs. 20 lacs., within one month from the date of receipt of the o....
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....de to show cause as to why penalty should not be imposed. The relevant provision regarding show cause notice as it then stood reads as under : "Section 124 - Issue of show-cause notice before confiscation of goods, etc No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person - (a) is given a notice in 1[writing with the prior approval of the officer of customs not below the rank of a Deputy Commissioner of Customs, informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter : Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral." 8. Chapter XIV-A provides for settlement of case. "Case" has been defined amongst others to mean any proceedings for the levy, collection an....
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....eport of the Commissioner of Customs or the Commissioner (Investigation) under sub section (1) of Section 6. Thus the orders can only be in respect of the matter covered by the application or included in the report of the Commissioner in answer to the application. Further under sub section (9) the order made under sub section(3) must make provision for the terms of settlement, manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective. 8. Section 127(F) also is relevant and we may reproduce the same. "Section 127F - Power and procedure of Settlement Commission (1) In addition to the powers conferred on the Settlement Commission under Chapter V of the Central Excise Act, 1944 (1 of 1944), it shall have all the powers which are vested in an officer of the customs under this Act or the rules made thereunder. (2) Where an application made under Section 127B has been allowed to be proceeded with under Section 127C, the Settlement Commission shall, until an order is passed under sub-section [(7)] of Section 127C, have, subject to the provisions of sub-section [(6)] of that section, exclusive jurisdiction to exercise the power....
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....b-section (4) of Section 245D. It is under this provision of the Act that the Commission will have to pass orders as it thinks fit on the matters covered by the application. In our opinion, sub-section (6) of Section 245D is only procedural in nature. It provides for fixing the terms by which the amount settled in sub­section (4) will have to be paid. It is not a Section which empowers the Commission either to waive or reduce the interest. At the cost of repetition, we must point out that apart from the fact that there is no specific empowerment of waiver or reduction of tax in Chapter XIX-A, it is also clear from the use of the expression "in accordance with the provisions of this Act" found in sub-section (4) of Section 245D, the settlement will have to be in conformity with the Act and not contrary to or in conflict with it." Similarly in C.I.T. v. Hindustan Bulk Carriers (2003) 3 Supreme Court Cases 57, this is what the court observed: "13. The Commission's power of settlement has to be exercised in accordance with the provisions of the Act. Though the Commission has sufficient elbowroom in assessing the income of the applicant and it cannot make any order with a term of ....
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....e concerned with an application which was moved on 3-3-2000. The only reason given by the Settlement Commission for imposition of the penalty is on the ground that disclosures made by the applicant are not consistent. We may only note that the Petitioner in the application initially had disclosed and admitted duty liability in the sum of Rs. 1,23,81,895/-. That was subsequently revised on the ground of error of calculation to Rs. 1,16,49,093/-. The Petitioner thereafter on 24-10-2001 agreed to pay Rs. 1,21,90,562/- as admitted duty. This was based on the computation made by G.D.F.T. by letter dated 15-10-2001. 11. Even if we assume that considering the provisions under Section 127(F) the exclusive jurisdiction to exercise powers and perform functions of the officer of Customs or Central Excise can be exercised by the commission. Nonetheless, that power had to be exercised in the manner set out under the Act which would include complying with the requirements under Section 124 of the Act. In the instant case, the Petitioner had come to the court based on show cause notices issued under powers conferred on the authorities. Show cause notices which were issued were under Section 124.....