By TIOL News Service

CHENNAI, DEC 15, 2016: THE order impugned in the writ petition is an order passed by the Customs and Central Excise Settlement Commission, rejecting the application and sending the matter back to the Adjudicating Authority in view of the bar under Sec 127B as per which no application for settlement can be made if it relates to the goods to which Section 123 applies. The consignments imported contained inter alia zip fasteners which are notified under Sec 123.

Before the High Court, the Petitioners produced a note containing the gist of the communication from the Additional Director, DRI to the Commissioner of Customs, Legal-SEA, wherein the DRI has taken a stand that the petitioner's case relates to mis-use of import certificates issued by AEPC, Tirupur and the wrong availment of the Notification 21/2002; the bar provided under Section 127B for the admission of the petition before the Settlement Commission is relating to the goods specified under Section 123 of the Customs Act, 1962 and even though the Zip fasteners, a specified item under Section 123 was also one of the items imported by the petitioner, the bar does not come to place in this case as the Zip fasteners were not seized by DRI and they were also not smuggled into India.

After hearing both sides, the High Court held:

++ Admittedly, there is no allegation of smuggling though one of the items which was imported by the petitioner under the classification of garment accessories in eight consignments was Zip fasteners. As admitted, the goods were not seized by the DRI nor there is any allegation against the petitioner that they smuggled those goods. The allegation itself is with regard to wrong availment of benefit of the exemption Notification. That apart, the eight consignments have all been together classified as garment accessories said to have contained various items. Thus, it would be virtually impossible for the assessing group to separate various items and to cull out only Zip fasteners and treat them under a separate category as it is the goods mentioned under Section 123 of the Customs Act, 1962.

++ As submitted by the DRI, the petitioner had admitted the entire allegation much prior to the issuance of the show cause notice and in fact, that was precisely the stand taken before the Settlement Commission. Thus, for the above reason and taking note of the pragmatic stand taken by the petitioner, this Court is of the considered view that the matter requires to be considered so as to bring about a finality to the entire litigation.

++ The impugned order is set aside and the matter is remanded to the Settlement Commission for fresh consideration by considering the conduct of the petitioner to proceed to settle the case by exercising the discretion and pass appropriate orders on the immunities claimed by the petitioner.

(See 2016-TIOL-3014-HC-MAD-CUS)