Cus - Settlement - Provisions that confer jurisdiction on CCESC should not be construed narrowly: High Court
By TIOL News Service
NEW DELHI, MAY 03, 2016: ON 24th April 2013, the Respondent arrived by a flight from Singapore and at the time of passing through Green Channel at the IGI Airport he was intercepted by the Customs officials. On enquiry, he informed that he was not carrying anything that required declaration before the Customs Department. It was noted that he had not written any value on the Customs portion of disembarkation slip. On screening his baggage on the X-Ray machine some suspicious dark images were noticed. On opening the baggage it was found that he was, inter alia, carrying 16 Sony Digital HD Video Camera Recorders made in Japan along with accessories and two Black Magic Cinema Cameras. The Respondent failed to produce the purchase bills. He revealed the price of Video Camera Recorder as Rs.1,00,000/- per piece but was unable to disclose the price of the Black Magic Cinema Camera. He claimed that these were given to him free with the other 16 pieces of Sony Cameras.
Upon inquiry made with the local dealers, the Customs Department ascertained that the MRP of the Video Camera was Rs.3,25,000/- per piece and, therefore, the total value of the 16 pieces of Sony Digital HD Video Cameras was arrived at Rs.36,40,000/-. The value of the two Black Magic Cinema Cameras was worked out as Rs.4,61,000/-.
The goods were seized u/s 110 of the Customs Act, 1962 ('Act'). The respondent tendered his voluntary statement admitting to bring the above dutiable goods from Singapore; was arrested and subsequently released on bail.
A provisional release order was passed on 30.09.2013 releasing the goods on payment of customs duty of Rs.10,63,432; furnishing of bank guarantee for Rs.5,30,000 and an indemnity bond for the 100% value. He was also to give an undertaking that he would not contest the recovery, identity, nature and value of goods in future in the course of adjudication or prosecution or any judicial or quasi-judicial proceedings.
The respondent complied and, therefore, the goods were provisionally released on 04.10.2013.
A SCN came to be issued by the Addl. Commr. on 18.10.2003 inter alia , proposing confiscation of the imported goods, levy of Customs Duty of Rs.10,63,432/- and penalty under Section 112/114AA of the Act.
The respondent chose to settle his case before the Customs & Central Excise Settlement Commission(CCESC) and in his application dated 07.11.2013 prayed that the duty liability of the subject goods be determined at Rs.10,63,432/- and be appropriated from the amount already deposited; immunity be granted from confiscation and redemption fine and penalty be waived.
The CCESC allowed the application to be proceeded with and intimated the applicant by letter dated 22.11.2013. Thereafter, by final order dated 9th June, 2014 the CCESC disposed of the application, inter alia, determining the customs duty at the amount already paid by the Respondent, reducing the penalty and fine to Rs.25,000 each, and, subject to the payment of the aforementioned amounts, ordering the release of the bond, discharge of the bank guarantee and granting immunity to the Respondent from prosecution.
The Customs Department is unhappy with this Settlement and is before the Delhi High Court.
Their main grievance is that the CCESC ought not to have entertained the application at all since the essential condition stipulated in Section 127B of the Act was not fulfilled. Inasmuch as since this was a case where no declaration had been made by the Respondent of the dutiable goods, it did not fall under the categories of 'misclassification, under-valuation or inapplicability of exemption notification or otherwise' as mentioned in Section 127B(1) of the Act. Reliance is inter alia placed on the decision in Shri Ram Niwas Verma - 2015-TIOL-2010-HC-DEL-CUS.
The High Court observed -
+ It is not in dispute that the present case is not covered by any of the provisos to Section 127B (1) of the Act. In other words, it does not fall under any of the excluded categories of cases.
+ It may be noted that the decision in Additional Commissioner of Customs v. Shri Ram Niwas Verma was a case where imported goods were covered under the third Proviso to Section 127B(1) and, therefore, the said decision is distinguishable on facts.
+ The Court sees no reason why in the circumstances of the present case the Respondent's admission that he had brought dutiable goods into the country while leaving blank the relevant column in the disembarkation card ought not to be considered as an attempt at evading payment of customs duty.
+ The provisions that confer jurisdiction on the CCESC should not be construed narrowly to exclude such type of cases from the purview of Section 127B. If that was the legislative intent, then there ought to have been a specific provision to that effect.
Holding that there is no reason to interfere with the impugned final order passed by the CCESC, the Writ Petition was disposed of.
In passing: Section 127B(1), first proviso, clause (a), of Customs Act, 1962 as substituted by the FA, 2014 [w.e.f 06.08.2014]
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;]
(See 2016-TIOL-860-HC-DEL-CUS)
