TaxTMI 
TaxTMI 
2013 (8) TMI 317
X X X X Extracts X X X X
X X X X Extracts X X X X
....port during the intervening night of 27/28-1-2008 with his son, the Customs Authorities seized three watches and other miscellaneous goods from his possession. The Customs department issued a show cause notice in July 2008 proposing demand of duty, confiscation and imposition of penalty to the applicant. Similar allegations were made against the applicant's son through another show cause notice dated 23-7-2009. However, in respect of the latter, by an order of the Joint Commissioner of Customs dated 18-9-2009 (No. 35 of 2009) further proceedings were dropped and matter attained finality. Upon receiving the show cause notice in respect of three wrist watches for which different customs duty, penalty and confiscation as proposed, the applicant moved the Settlement Commission under Section 127(1) of the Customs Act. The Commissioner of Customs resisted the proceedings contending that the issue could not be gone into by the Commission as it did not constitute "case" under Section 127(C) of the Act. The merits of the application too were resisted. It was contended that the applicant had not filed bill of entry and the case was one of outright smuggling. The Commission in its order (impu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g application of exemption notification or due to undervaluation of goods etc. A mis-declaration show cause notice issued under Section 124 read with Section 125 can propose confiscation even though duty is demanded under Section 28. Counsel also emphasized that this embarkation form cannot any circumstance be meant to be filed within the description "entry" under Section 2(16) of the Act. 4. Counsel for the applicant argued that each of the submissions made by the Customs Department had been urged in great detail and considered by the Commission by its elaborate order. The counsel emphasized that the Commission after examining the show cause notice stated that it had invoked both demands of additional duty and re-determination of value of the allegedly undervalued goods and held that demand of duty therefore brought the goods within the ambit of its jurisdiction. Counsel highlighted the fact that the Settlement Commission had followed the decision of Madras High Court in V.C. Mohan v. Commissioner of Customs, 2008 (222) E.L.T. 344. A similar interpretation was adopted by the Bombay High Court in Commissioner of Customs, Mumbai v. Manish Kalvadiya - 2008 (228) E.L.T. 342. It was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le under the provisions of this Act or the rules made thereunder in respect of such duty or interest. SECTION 77. Declaration by owner of baggage. - The owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. SECTION 78. Determination of rate of duty and tariff valuation in respect of baggage. - The rate of duty and tariff valuation, if any, applicable to baggage shall be the rate and valuation in force on the date on which a declaration is made in respect of such baggage under Section 77. 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 writing with the prior approval of the officer of Customs not below the rank of an Assistant 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 speci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....him by the proper officer; (b) the additional amount of duty accepted by the applicant in his application exceeds three lakh rupees; and (c) the applicant has paid the additional amount of customs duty accepted by him along with interest due under Section 28AB : Provided further that no application shall be entertained by the Settlement Commission under this sub-section in cases which are pending in the Appellate Tribunal or any court : Provided also that no application under this sub-section shall be made in relation to goods to which Section 123 applies or to goods in relation to which any offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985) has been committed : Provided also that no application under this sub-section shall be made for the interpretation of the classification of the goods under the Customs Tariff Act, 1975 (51 of 1975). (1A) Notwithstanding anything contained in sub-section (1), where an application was made under sub-section (1) before the 1st day of June, 2007 but an order under sub-section (1) of Section 127C has not been made before the said date, the applicant sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der this Act or any other Act for the levy, assessment or collection of customs duty or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before the proper officer or Central Government, can only be regarded as a case coming within the purview of Section 127-B, since the present case is one of prima facie smuggling, there is no question of levy, assessment and collection of customs duty and as such the dispute will not come within the purview of Section 127-B, which contention was found in favour of the Department by the learned Single Judge. We are not able to countenance this contention also for the reason that as per second limb of Section 125 of the Customs Act, if the goods confiscated are not prohibited goods, an option has to be given to the importer to pay, in lieu of confiscation, such fine, i.e. the redemption fine. In such case, the importer has to pay duty and charges payable in respect of such goods. In order to arrive at the duty and charges payable under Section 125, an assessment has to be made, the duty and charges payable under Section 125, an assessment has to be made, the duty has to be levie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to file a bill o f entry. Goods can also be imported through other means, such as through post, courier service or as baggage. It is difficult to appreciate that such imports through post, courier service or baggage should be denied settlement of disputes merely because they have chosen a particular mode for importation of goods and have filed some other document instead of a bill of entry. In fact, in respect of goods imported through post sub-section (16) of Section 2 deems the label or declaration accompanying the goods which contains the description, quantity and value thereof to be treated as an entry for import or export. In the case of baggage, Section 77 of the Customs Act, 1962 requires the owner of any baggage, for the purpose of clearing it, to make a declaration of its contents to the proper officer .................." 8. It appears from the reading of the impugned order that the Commission took a broad view of its jurisdiction under Sections 127(A) and 127(B) of Act. This Court is conscious of the fact that being a Tribunal of limited jurisdiction the Commission could not have forayed that amounts so demanded do not fall within the jurisdiction of "case". However, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lvadiya, this Court by its judgment and order dated 21st July, 2005 set aside the order of the Settlement Commission dated 16th August, 2004 and held that the application was maintainable. It is the case of the Revenue that the Special Leave Petition filed against the decision of this Court dated 21st July 2005 is pending before the Apex Court. Therefore, when this Court has already ruled that the application filed by Manish Kalvadiya is maintainable, it is not open to the revenue to contend that the Settlement Commission was in error in entertaining the application filed by Manish Kalvadiya. Accordingly, the first argument of Mr. Jetly is liable to be rejected. 10. As regards the second argument of Mr. Jetly, on perusal of the show cause notice, it is seen that there were two issues (one) relating to confiscation of 5877 carats of cut and polished diamonds seized from Manish Kalvadiya and (two) confiscation of 34147.66 carats of cut and polished diamonds seized from the office premises of M/s. I.P. Patel & Co. Admittedly, said Manish Kalvadiya and M/s. I.P. Patel have filed independent applications before the Settlement Commission. It is pertinent to note that in the applicatio....