The Additonal Commissioner Of ... vs Shri Ram Niwas Verma
2015 Latest Caselaw 6246 Del

         THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 25.08.2015


+       W.P.(C) 7363/2014 & CM 17221/2014


THE ADDITONAL COMMISSIONER OF CUSTOMS ... Petitioner
                                          versus

SHRI RAM NIWAS VERMA                                              ... Respondent

Advocates who appeared in this case:
For the Petitioner                     : Mr Satish Kumar
For the Respondent                     : Mr Sanjeev Malhotra

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA

                                       JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

1. This writ petition is being filed by the Revenue seeking the quashing

of the order dated 16.05.2014 passed by the Customs and Central Excise

Settlement Commission, New Delhi (hereinafter referred to as 'the

Settlement Commission') under Section 127C(5) of the Customs Act, 1962

(hereinafter referred to as the 'said Act').

2. The short point raised by the learned counsel for the petitioner/

Revenue is that the application filed by the respondent for settlement of its

case could not have been entertained by the Settlement Commission because

there was an express bar contained in the third proviso to Section 127B(1) of

the said Act.

3. Before we examine that, it would be necessary to point out that the

respondent had, as part of his baggage, brought into India 6452.600 gms of

gold. He did so on 16.06.2013 while arriving at the Indira Gandhi

International Airport, Delhi from Dubai by flight No. EK-514. While the

respondent was trying to cross the green channel, a Customs Officer

intercepted him and on being asked by the Customs Officer as to whether he

carried any dutiable goods, the respondent replied in the negative and, on

demand, produced the disembarkment card. In the disembarkment card, the

column of dutiable goods was left blank. The baggage of the respondent as

also his person was searched and, on examination, it was found that the

respondent was carrying gold wrapped in brown tape which was tied to his

waist by a black belt. The extent of gold that was found on his person was

6452.600 gms and the same was seized by the Customs Officer. Thereafter,

various proceedings took place and a show cause notice was issued etc. We

are not concerned with the rest of the details.

4. The respondent made an application, purportedly under Section 127B

of the said Act, on 12.11.2013. The Settlement Commission, after going

through the various steps, passed the impugned order dated 16.05.2014 under

Section 127C(5) of the said Act.

5. As point out above, the issue raised by the learned counsel for the

petitioner/ Revenue is that the respondent could not have moved an

application under Section 127B before the Settlement Commission and the

Settlement Commission did not have jurisdiction to go into the matter at all.

The learned counsel submitted that this was in view of the express bar

contained in Section 127B(1) third proviso read with Section 123 of the said

Act. Section 127B(1) to the extent relevant reads as under:-

"127B. Application for settlement of cases. - (1) Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, in respect of a case, relating to him make an application, before adjudication to the Settlement Commission to have the case settled, in such form and in such manner as may be specified by rules, and containing a full and true disclosure of his duty liability which has not been disclosed before the proper officer, the manner in which such liability has been

incurred, the additional amount of customs duty accepted to be payable by him and such other particulars as may be specified by rules including the particulars of such dutiable goods in respect of which he admits short levy on account of misclassification, under- valuation or inapplicability of exemption notification or otherwise and such application shall be disposed of in the manner hereinafter provided :

Provided that no such application shall be made unless,--

(a) the applicant has filed a bill of entry, or a shipping bill, or a bill of export, or made a baggage declaration, or a label or declaration accompanying the goods imported or exported through post or courier, as the case may be, and in relation to such document or documents, a show cause notice has been issued to 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 28AA:

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)        xxxx      xxxx          xxxx         xxxx





       (2)         xxxx         xxxx        xxxx         xxxx

      (3)         xxxx         xxxx        xxxx         xxxx

      (4)         xxxx         xxxx        xxxx        xxxx"
                                                     (underlining added)

6. Section 123 of the said Act is also relevant. The same is reproduced

herein below:-

"123. Burden of proof in certain cases.--(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be--

(a) in a case where such seizure is made from the possession of any person,--

(i) on the person from whose possession the goods were seized; and

(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;

(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.

(2) This section shall apply to gold and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette, specify."

(underlining added)

7. On a plain reading of the third proviso to Section 127B(1) of the said

Act, it is evident that no application for settlement can be made if it relates to

goods to which Section 123 applies. Section 123 sub-section (2) specifically

provides that the said Section applies to, inter alia, gold. It is, therefore,

clear that when the two provisions are read together, no application under

Section 127B(1) can be made in relation to gold. This case clearly pertains

to gold. The respondent made an application, nevertheless, to the Settlement

Commission which has entertained the same and has also rejected the plea

raised by the Revenue that it did not have jurisdiction to entertain such an

application. We agree with the submission made by the learned counsel for

the Revenue that the Settlement Commission did not have the jurisdiction to

entertain such an application as there was a complete bar provided in the

third proviso to Section 127B(1) read with Section 123 of the said Act.

8. The learned counsel for the respondent sought to draw some support

from a decision of this Court in the case of Commissioner of Customs v.

Ashok Kumar Jain: 2013 (292) ELT 32 (Del) as also a subsequent decision

of another Division Bench of this Court in Komal Jain v. Union of India

and Another: 2014 (304) ELT 675 (Del). In Ashok Kumar Jain (supra),

the issue of Section 123 has not been considered at all. Insofar as the

decision in Komal Jain (supra) is concerned, the Division Bench itself, in

paragraph 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 Section 123 applies includes gold, as specifically indicated in

Section 123 (2) of the said Act.

9. For all these reasons, the impugned order passed by the Settlement

Commission is without jurisdiction. The same is set aside. The writ petition

is allowed.

                                       BADAR DURREZ AHMED, J


AUGUST 25, 2015                         SANJEEV SACHDEVA, J
SR