By TIOL News Service

MUMBAI, JUNE 19, 2015: THE Commissioner (Appeals) dismissed the appeal for non-compliance of the order of pre-deposit of Rs.10,00,000/-. Against this order, Pankaj Kumar Das is before the CESTAT.

The background of the case is that DRI seized the machine imported by the party after it was cleared on payment of duty under EPCG Scheme. A show cause notice was issued. The Settlement Commission, vide final order dated 30.6.2009, settled the show cause notice on payment of duty, interest, fine and penalty. The total duty, interest, fine and penalty paid on the impugned goods was Rs.25,42,290/-, Rs.2,26,530/-, Rs.1,00,000/- and Rs.50,000/- respectively.

Almost three years later, the Additional Commissioner of Customs issued another SCN on 02.01.2012 on the ground that the very same goods were undervalued.

What was the point of settlement, the appellant must have thought!

The adjudicating authority was also quick to confirm the demand of differential duty of Rs.7,90,238/-, fine of Rs.9,33,364/- and penalty of Rs.9,33,364/-.

As the Commissioner(A) was reluctant to hear the appellant without he making a pre-deposit of Rs.10 lakhs, he dismissed the appeal and thus the knock on the doors of the CESTAT.

Be that as it may, the Bench after considering the submissions observed -

"…in this case the Customs have reopened the matter on a different issue of valuation after the Settlement Commission had passed its final order. In terms of Section 127J every order of the Settlement Commission is conclusive and no matter covered by such order shall be reopened in any proceedings under the Customs Act or under any other law for the time being in force. Therefore, we find the decisions of Customs authorities in re-opening the case as questionable. However, since the appeal before Commissioner of Customs (Appeals) was dismissed for non-compliance of the provision of Section 129 of the Act, we find it appropriate to remand the appeal itself back to the Commissioner (Appeals) for fresh adjudication."

The Bench directed the Commissioner (Appeals) to hear the case without insisting on pre-deposit.

The CESTAT also found it apt to advise the lower appellate authority to hear the case on merits, after considering the provisions of the “Settlement of Cases” under Chapter XIVA of the Customs Act.

The Appeal was disposed of by way of remand.

In passing : Perhaps the department can also take a look at section 127C(8) of the Customs Act, 1962 which says - the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts:

(See 2015-TIOL-1186-CESTAT-MUM)