By TIOL News Service

NEW DELHI, SEPT 01, 2015: THE facts are that 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. Consequently, a show cause notice was issued.

The respondent made an application on 12.11.2013 and the Settlement Commission passed an order dated 16.05.2014 settling the case.

In this Writ Petition, the Revenue is seeking quashing of the order passed by the Settlement Commission on the ground that the case could not have been entertained because there was an express bar contained in the third proviso to Section 127B(1) of the Customs Act.

The High Court extracted the provisions adverted to thus -

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:

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)

The High Court observed -

"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."

Holding that the order passed by the Settlement Commission is without jurisdiction, the same was set aside and the Writ petition was allowed.

(See 2015-TIOL-2010-HC-DEL-CUS)