TaxTMI 
TaxTMI 
2016 (5) TMI 299
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....show cause notice was issued to the petitioner on 02.12.2014 by the Additional Director General of Revenue Intelligence calling upon the petitioner why seized gold valued at Rs. 6.75 crores not be confiscated absolutely and penalty under Section 112(a) of the Customs Act, 1962 ("the Act" for short) not be imposed on the petitioner. The show cause notice also proposed personal penalties and confiscation of the vehicle in which the goods were being transported at the time of seizure. 2.1 Pending such show cause notice proceedings, the petitioner applied to the Settlement Commission on 19.03.2015 and requested for settlement in terms of Chapter-XIVA of the Act. On such application, the Customs Department raised objection of the jurisdiction of the Settlement Commission contending that the goods are such to which Section 123 of the Act applies and that therefore, in terms of the 3rd proviso to Section 127B of the Act, the Settlement Commission would have no jurisdiction to entertain application of the petitioner for settlement. 2.2 The Commission passed its impugned order dated 15.12.2015 and relying on the decision of the Delhi High Court in case of Additional Commissioner of Cu....
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....Verma (supra). The Supreme Court dismissed SLP against the said judgment of the Delhi High Court. The Karnataka High Court also in case of C.S.India Vs. Additional Director General, DCEI, Bangalore, reported in 2015 (325) ELT, page No.91 (Kar.) has independently taken a similar view. They submitted that in any case, in Special Civil Application No.3144 of 2016, there was seizure of gold on the premise that the shifting of gold outside of SEZ area would amount to smuggling and therefore, even if the interpretation of the petitioners were to be accepted, the petitioners' case would be covered within the exclusion clause contained in the 3rd proviso to sub-section (1) of Section 127B of the Act. 6. In order to resolve the controversy, we may first notice the statutory provisions contained in the Act. Chapter-XIVA pertains to settlement of cases. Section 127A is a definition Section. Clause-(b) thereof defines term "case" as to mean any proceeding under the Act or any other Act for the levy, assessment and collection of customs duty, pending before any adjudicating authority on the date on which an application under sub-section (1) of Section 127B is made. Section 127B pertains ....
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....porter or any other person may, in respect of a case relating to him, make an application to the Settlement Commission making full and true disclosure of his duty liability and the manner in which such liability has been incurred. 3rd proviso to sub-section (1) of Section 127B provides 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 has been committed. 8. Section 123 is contained in Chapter-XIV of the Act pertaining to confiscation of goods and conveyances and imposition of penalties. Section 111 contained in Chapter-XIV pertains to confiscation of improperly imported goods. Section 112 pertains to penalty for improper importation of goods. Various other Sections contained in the said Chapter pertain to confiscation and penalties under different situations of illegal or irregular imports and exports of goods. Section 122 pertains to adjudication of confiscations and penalties. Section 122A provides that adjudicating authority shall, in any proceedings under this Chapter or other provisions of the Act, give an oppor....
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....lauses-(a) and (b) to sub-section (1). In turn, sub-section (2) specifies the class of goods to which the section would apply. Section 123 thus is framed in two parts. Subsection (1) provides for the shifting of burden of proof and the conditions under which such eventuality to the class of goods to which the section applies, would arise. Sub-section (2) merely specifies the class of goods to which the section would apply. Thus, class of goods specified in sub-section (2) are those to which the section itself would apply and if the conditions set out in sub-section (1) of Section 123 are satisfied with respect to such goods, the eventualities of shifting of burden on the owner or person in possession of such goods would arise. 11. 3rd proviso to sub-section (1) of Section 127B incorporates by reference the applicability clause of Section 123. Incorporation by reference is a well known legislative technique to avoid repetition of the same set of words in different sections of the same statute or some times even in different statutes. In essence, therefore, 3rd proviso to sub-section (1) of Section 127B incorporates the applicability clause of Section 123 for the ouster of the jur....
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....agraph 21, observed that the issue with regard to the applicability of Section 123 of the Act by way of the third proviso to Section 127B was left open and it was for the Settlement Commission to examine the same, if such a point was raised, in accordance with law. In the present case, we find that the point with regard to the third proviso to Section 127B(1) read with Section 123 of the said Act had been specifically raised by the Revenue and the same has been considered by the Settlement Commission and has been rejected. We have already indicated above that the rejection by the Settlement Commission is not in accordance with law. A plain reading of the provisions clearly indicates that an application under Section 127B cannot be made in respect of, inter alia, gold, which is specifically an item to which Section 123 applies. We may point out that there is no question of examining the provisions of Section 123(1) as also its applicability because that is not the context of the third proviso to Section 127B(1). The said proviso only makes a reference to the goods to which Section 123 applies and not to Section 123 itself. We have already made it clear that the goods to which Sectio....