By TIOL News Service

MUMBAI, SEPT 10, 2013: THE short question raised in this petition is:

"Whether the Customs & Excise Settlement Commission was justified in rejecting the petitioner's application for settlement under the Customs Act, 1962 (in short "the Act"), merely on the ground that the petitioner had not filed a Baggage Declaration Form?"

The facts are - On June 9, 2011, a SCN was issued to the petitioner, demanding the duty of Rs.76.45 lakhs u/s 28(1) of the Customs Act in respect of 1425 kgs of "888" brand glass chatons which is alleged to have been illegally imported into the country without payment of customs duty.

On January 31, 2012, the petitioner filed an application for settlement u/s 127B seeking to settle the dispute raised in the impugned SCN. The petitioner also stated at Serial No.7 of its settlement application that though no bill of entry was filed, the Baggage Declaration Form under Section 77 of the said Act was filed by the carrier of the said goods, when brought into India.

The Settlement Commission dismissed the application on the ground that the petitioner did not satisfy the condition precedent for entertaining the settlement application as provided under the proviso (a) to Section 127 (B)(1) of the said Act. Inasmuch as the Baggage Declaration Form required to be filed under Section 77 was not filed by the applicant.

Against this order, the applicant is before the Bombay High Court.

The High Court observed -

"8. …In this case, the petitioner has not filed any bill of entry so as to satisfy the strict reading of the proviso (a) to Section 127B(1) of the said Act. However in the matter of Abu JaniSandeepKhosla (supra), the Settlement Commission relied upon the decision of this Court in the matter of Commissioner of Customs,   Mumbai v/s. Manish Kalvadia, reported in 2008 (228) E.L.T. 342   to hold that the Settlement Commission would have jurisdiction to settle cases, even in case where no bill of entry has been filed for imported goods, if the same has been cleared under a Baggage Declaration Form. Therefore, the petitioner would be entitled to the benefit of Section 127B(1) of the said Act if the Baggage Declaration Form has been filed at the time of the import of goods. However, in this case, it is an admitted position that no Baggage Declaration Form had been filed before the Settlement Commission by the petitioner to evidence its filing at the time of import. In these circumstances, the impugned order held that the petitioner cannot avail of the remedy of Settlement Commission to settle its dispute with the Customs Department in the absence of a Baggage Declaration Form. Further, the decision of the Settlement Commission in Abu JaniSandeepKhosla (supra), is completely distinguishable as in the facts of that case, the applicant had before the Settlement Commission filed the Baggage Declaration Forms under which the goods had been imported by professional carriers. In this particular case, the applicant has not filed any Baggage Declaration Form. Moreover, the show cause notice issued to the petitioner has not been issued in relation to any Baggage Declaration Form. In fact, the show cause notice does not extend the benefit of exemption Notification on the ground that they are smuggled goods. Non-filing of Baggage Declaration Form before the Settlement Commission would imply that no Baggage Declaration Form mentioning the said goods has even been filed. Therefore, the goods have been smuggled into India i.e. without having disclosed the same at the time of import. The submission of the petitioner that as the said goods were imported in baggage, it follows that the Baggage Declaration Form has been filed cannot be accepted. It is the case of the revenue in the show cause notice that though the said goods have come as baggage, however, no Baggage Declaration Form has been filed, resulting in the said goods being smuggled into India. The import of goods as baggage does not ipso facto mean that Baggage Declaration Form has been filed by the carrier. We note that the Proforma of Baggage Declaration Form as prescribed under Section 81 of the Act has a column for description of goods. Therefore, the submission of the Counsel for the petitioner that the goods are not required to be described in the Baggage Declaration Form, cannot be accepted. In this case, the petitioner has not been able to even establish that the Baggage Declaration Form has at all been filed and if so, by whom and when. Hence, where Baggage Declaration Form is not filed, jurisdiction under Section 127B(1) of the said Act cannot be exercised by the Settlement Commission."

Answering the question in the affirmative, the Writ Petition was dismissed.

In passing: Vide notification 90/2013-Cus (NT) dated August 29, 2013, the   CBEC has notified the Customs Baggage Declaration Regulations, 2013 to be effective from 01.01.2014. Also see DDT-2181.

(See 2013-TIOL-685-HC-MUM-CUS)