TaxTMI 
TaxTMI 
2026 (9) TMI 1228
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.... M/s Dugar Overseas Pvt. Ltd. The present Writ Petition, however, has been instituted only by the Petitioner and the challenge is confined to the Impugned Order insofar as it concerns the Petitioner. FACTUAL MATRIX: 3. In order to appreciate the controversy arising in the present Petition, it would be appropriate to notice the relevant facts as recorded by the Settlement Commission. The correctness of the factual narration, insofar as it is material to the present controversy, has not been shown to be disputed before this Court. 4. The case arose out of an investigation conducted by the Directorate of Revenue Intelligence, Mumbai Zonal Unit [hereinafter referred to as "DRI"] into alleged under-invoicing and consequent misdeclaration of the transaction value and Retail Sale Price [hereinafter referred to as "RSP"] of confectionery items imported from M/s Seville Products Ltd., Dubai. The intelligence developed by the DRI indicated that importers of confectionery items, including wafers, cookies and toffees, were allegedly declaring values lower than the actual values of the goods with a view to evading Customs duty. The differential amount corresponding to the suppressed va....
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....rs 9 7316587 18499019 4794160 4 ICD TKD Beyond 5 years 2 1478925 4354590 1159990 5 Chennai Beyond 5 years 2 1453062 4068454 1066198 Total 13 10248574 26922063 7020348 Grand Total 21 14507141 41381498 11588712 9. The above figures are significant to the controversy before this Court. Out of the total differential duty of Rs. 1,15,88,712/-, an amount of Rs. 45,68,364/- related to imports falling within five years, whereas an amount of Rs. 70,20,348/- related to imports which were beyond five years. 10. During the course of investigation, the Petitioner deposited a total amount of Rs. 85,00,000/- voluntarily. The Settlement Commission recorded that, in his statement dated 26.06.2015, Shri Navin Singh admitted the differential duty liability of Rs. 1,15,88,712/-and stated that the amount of Rs. 85,00,000/- voluntarily deposited during investigation should be adjusted towards the differential duty payable for the period 2008-09 to 2010-11. He further stated that the remaining amount would be paid subsequently which was not deposited or paid. 11. The manner in which the said voluntary deposit of ....
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....al 8 4258567 14459435 4568364 3 Nhava Sheva Beyond 5 years 9 7316587 18499019 4794160 Joint/Addition al Commissioner, Nhava Sheva-1, Mumbai-Zone-II 4 ICD TKD Beyond 5 years 2 1478925 4354590 1159990 Joint/Addition al Commissioner, ICD TKD (import) 5 Chennai Beyond 5 years 2 1453062 4068454 1066198 Joint/Addition al Commissioner, Chennai II Total 13 10248574 26922063 7020348 Grand Total 21 14507141 41381498 11588712 15. The Show Cause Notice accordingly called upon the Petitioner to show cause, inter alia, as to why the transaction value of the goods imported under the 21 Bills of Entry should not be taken as per the actual value invoices and the assessable value re-determined as Rs. 4,13,81,498/- under Section 14 of the Customs Act read with Rule 3(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, instead of the declared assessable value of Rs. 1,45,07,141/-. 16. The Petitioner was further called upon to show cause as to why the declared RSP should not be rejected and re-determined; why differential d....
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....ssed the Impugned Order dated 26.02.2018 under Section 127C(5) of the Customs Act. 22. The Settlement Commission accepted the differential duty liability of Rs. 45,68,364/- pertaining to the period within five years. As regards the amount of Rs. 70,20,348/- pertaining to the period beyond five years, the Settlement Commission held that although the limitation under Section 28 of the Customs Act restricted the Department's statutory power to issue a demand beyond the prescribed period, such limitation did not prevent the importer from voluntarily paying the duty liability. 23. The Settlement Commission, in particular, took note of the statement of Shri Navin Singh dated 26.06.2015, wherein he had admitted the total differential duty liability of Rs. 1,15,88,712/- and had stated that the amount of Rs. 85,00,000/- voluntarily deposited by the Petitioner should be adjusted towards the differential duty payable for the period 2008-09 to 2010-11. 24. On that basis, the Settlement Commission appropriated Rs. 70,20,348/- out of the amount of Rs. 85,00,000/- towards the differential duty pertaining to the imports beyond five years. The remaining amount of Rs. 14,79,652/- was ap....
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....d Standing Counsel for the Respondents submits that the Petitioner seeks to conflate two distinct matters, namely, the statutory power of the Department to issue a demand under Section 28 of the Customs Act and the voluntary payment already made by the Petitioner during the course of investigation. 27.2. He submits that no fresh demand under Section 28 was raised for the period beyond five years. According to him, the amount of Rs. 85,00,000/- had already been voluntarily deposited by the Petitioner and Shri Navin Singh, proprietor of the Petitioner-firm, had specifically stated in his statement dated 26.06.2015 that the said amount should be adjusted towards the differential duty payable for the period 2008-09 to 2010-11. 27.3. It is further submitted that the statements of Shri Navin Singh dated 11.02.2014 and 26.06.2015 were never retracted. Learned Standing Counsel also points out that the Petitioner has not filed any rejoinder to the counter-affidavit and has not placed before this Court the aforesaid statements, notwithstanding the specific reliance placed upon them by the Settlement Commission as well as the Respondents. 27.4. He submits that the Settlement Commissi....
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....erated this factual position in paragraph 3 of their counter-affidavit. The said paragraph reads as under: "3. I say and submit that the Petitioner's proprietor, Sh. Navin Singh made a categorical statement on 11.02.2014 and 26.06.2015 during the course of investigation before the custom authorities wherein he voluntarily admitted that he was involved in the illegal practice of evasion of custom duty as enumerated in the paragraph above. He further accepted the Petitioner's liability to pay the differential custom duty of INR. 1,15,88,712/- to the Department of Custom which was inclusive of the differential duty payable for the period 2008-09 to 2010-11. In pursuance of this, the Petitioner voluntarily deposited a sum of INR. 85,00,000/- towards payment and adjustment of differential custom duty stated above further made a statement to pay the outstanding amount of INR. 30,99,712/- within one week from the relevant date." 33. Significantly, no rejoinder to the counter-affidavit has been filed by the Petitioner. The Petitioner has also not placed on record the statements dated 11.02.2014 and 26.06.2015 of Shri Navin Singh. Consequently, there is no material befor....
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....ed Order. Rather, it dealt with an amount which had already been deposited by the Petitioner during investigation and considered its appropriation in light of the admission and request recorded in the statement of the proprietor. 39. The submission of the Petitioner that the amount of Rs. 70,20,348/- had never been sought to be adjusted by it also cannot be accepted at this stage. It is correct that, in the settlement application, the Petitioner disputed its liability to pay Rs. 70,20,348/-on the ground that the amount pertained to imports beyond the extended period of five years. However, the Settlement Commission has recorded a separate and specific factual finding based upon the statement of Shri Navin Singh dated 26.06.2015, namely, that the amount of Rs. 85,00,000/- voluntarily deposited during investigation was to be adjusted towards the differential duty payable for the period 2008-09 to 2010-11. 40. The distinction between the stand taken in the settlement application and the request recorded in the statement during investigation is important. The Petitioner may have disputed the enforceability of the amount of Rs. 70,20,348/- under Section 28 in the settlement applic....
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....a time-barred demand through the "back door" also cannot be accepted. The Impugned Order has to be read as a whole. The Settlement Commission first settled the differential duty liability pertaining to the period within five years at Rs. 45,68,364/-. It thereafter considered the amount of Rs. 85,00,000/- already deposited and, on the basis of the factual findings recorded by it, held that the amount of Rs. 70,20,348/-towards the differential duty pertaining to the period beyond five years stands already appropriated. The remaining Rs. 14,79,652/- was thereafter adjusted towards the settled liability of Rs. 45,68,364/-. 47. Section 127J of the Customs Act provides finality to an order of settlement in terms of the statutory scheme. Such finality does not, of course, exclude the constitutional jurisdiction of this Court under Article 226 of the Constitution of India. However, the availability of judicial review does not mean that the writ jurisdiction is to be exercised as an appellate jurisdiction over the factual findings recorded by the Settlement Commission. 48. This Court would certainly be entitled to interfere where the Settlement Commission has acted without jurisdictio....