Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
(Legal Ceil)
' C' Wing, 5m Floor, HUDCO_VISHALA Building
Bhikaji Cama place, R.K. puram,
New Delhi-66: dated the 01.10.2015.
INSTRUCTION
To
1' A11 Chief Commissioners of Customs, Central Excise and Service Tax;
2. All Director Generals of Customs, Central Excise and service Tax;
3. <[email protected]
sub:- Jurisdiction of the settlement commission (customs, central Excise &
service Tax) in respect of the cases of Gold Smuggling- regarding;
Board has received references from the field formations in respect of the
jurisdiction of the settlement Commission in the settlement of the cases of gold
smuggling. The Mumbai bench of the settlement Commission had decided some cases
holding that they have the jurisdiction even in respect of goods specified under
section 123 of the customs Act, 1962, and have accordingly allowed the
settlement of cases of gold smuggling. However, a divergent view was taken by
the Kolkata bench of the settlement Commission.
- The said issue has been considered by the Delhi High court in case of
Additional Commissioner of Customs vs shri Ram Niwas verma [W.P.(c) No.
7363/2014 & CM 17221/2014 vide its order dated 25th' August 2015, holding that
settlement Commission has no jurisdiction to decide cases in relation to
smuggling of the goods specified under section l?s of Customs Act,1962. A copy
of the said order dated 25.8.2015 is attached for ready reference
- In view of the said order of the Delhi High Court, it is clarified that
settlement Commission has no jurisdiction to entertain the matteis in relation
to the goods specified under
section 123 of the Customs Act, 1962 which include Gold. In case the settlement
Commission admits any such matter for settlement the jurisdictional field
formation should challenge the same in High Court by way of Writ at the stage of
admission
- Above instructions may be brought to the knowledge of alt formations within
your jurisdiction.
F.N o.27 5/ 46/ 201s-CX. 8A
Yours faithfully
Enclosure: As above
(Harsh Vardhan)
Senior Analyst
Tel:011-261954
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 25.08.2015
+ w.P.(c) 736312014 & CM r722r/20r4
THE ADDITONAL COMMISSIONER OF CUSTOMS ... Petitioner
versus
SHRI RAM NIWAS VERMA ... Respondent
Advocates who anpeared in this case:
For the Petitioner : Mr Satish Kumar
For the Respondent : Mr Sanjeev Malhotra
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
BADAR DURREZ AHMED" J (ORAL)
- This writ petition is being filed by the Revenue seeking the quashing of the
order dated 16.05.2014 passed by the Customs and Central Excise Settlement
Commission, New Delhi (hereinafter referred to as 'the Settlement Commission')
under Section I27C(5) of the Customs Act, 1962 (hereinafter referred to as the
'said Act').
- The short point raised by the learned counsel for the petitioner/Revenue is that
the application filed by the respondent for settlement of its case could not
have been entertained by the Settlement Commission because there was an express
bar contained in the third proviso to Section l27B(l) ot the said Act.
- Before we examine that, it would be necessary to point out that the respondent
had, as part of his baggage, brought into India 6452.600 gms of gold. He did so
on 16.06.2013 while arriving at the Indira Gandhi International Airport, Delhi
from Dubai by flight No. EK-514. 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 carying 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. Thereafter, various
proceedings took place and a show cause notice was issued etc. We
are not concerned with the rest of the details.
- The respondent made an application, purportedly under Section l27B of the said
Act, on 12.11.2013. The Settlement Commission, after going through the various
steps, passed the impugned order dated 16.05.2014 under Section l27C(5) of the
said Act.
- As point out above, the issue raised by the learned counsel for the petitioner/
Revenue is that the respondent could not have moved an application under Section
I27B before the Settlement Commission and the Settlement Commission did not have
jurisdiction to go into the matter at all. The learned counsel submitted that
this was in view of the express bar contained in Section l27B(l) third proviso
read with Section 123 of the said Act. Section l27B(1) to the extent relevant
reads as under:-
"1278. Application for settlement of cases.- (1) Any importer, exporter or any
other person (hereinafter referred to as the applicant in this Chapter) fr&y, in
respect of a case, relating to him make an application, before adjudication to
the Settlement Commission to have the case settled, in such form and in such
manner as may be specified by rules, and containing a full and true disclosure
of his duty liability which has not been disclosed before the proper officer,
the rnanner in which such liability has been incurred, the additional amount of
customs duty accepted to be payable by him and such other particulars as may be
specified by rules including the particulars of such dutiable goods in respect
of which he admits short levy on account of misclassification, undervaluation or
inapplicability of exemption notification or otherwise and such application
shall be disposed of in the manner hereinafter provided:
Provided that no such application shall be made unless,- 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; the additional amount of duty accepted by the applicant in his application
exceeds three lakh rupees; and the applicant has paid the additional amount of customs duty accepted by him
along with interest due under Section 28AA: Provided further that no application shall be entertained by the Settlement
Commission under this sub-Section in cases which are pending in the Appellate
Tribunal or any court: 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 Provided also that no application under this sub-Section shall be made for the
interpretation of the classification of the goods under the Customs Tariff Act,
1975 (51 of 1975).
(1A) XXXX XXXX XXXX XXXX (2) XXXX XXXX XXXX XXXX (3) XXXX XXXX XXXX XXXX (4) XXXX XXXX XXXX XXXX (underlining added)
- Section 123 of the said Act is also relevant. The same herein below:-
"123. Burden of proof in certain cases.-(l) where any goods to which this
section applies are seized under this eci 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, speci$r." (underlining
added)
- On a plain reading of the third proviso to Section I27B(I) 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 l27B(l) 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 l27B(I) read with Section 123 of the said Act.
- The learned counsel for the respondent sought to draw some support from a
decision of this Court in the case of Commissioner of Customs v. Ashok Kumar
Jain: 2013 (292) ELT 32 (Del) as also a subsequent decision of another Division
Bench of this Court in Komul Jain v. Union of India und Another: 2014 (304) ELT
675 (Del). In Ashok Kumar Jain (supra) the issue of Section 123 has not been
considered x all. Insofar as the decision in Komul Jlin (sufra) is concerned,
the Division Bench itself, in paragraph 21, observed that the issue with regard
to the applicability of Section 123 of the Act by way of the third proviso to
Section l27B was left open and it was for the Settlement Commission to examine
the same, if such a point was raised, in accordance with law. In the present
case, we find that the point with regard to the third proviso to Section l27B(l)
read with Section 123 of the said Act had been specifically raised by the
Revenue and the same has been considered by the Settlement Commission and has
been rejected. We have already indicated above that the rejection by the
Settlement Commission is not in accordance with law. A plain reading of the
provisions clearly indicates that an application under Section l27B cannot be
made in respect of, inter alia, gold, which is specifically an item to which
Section 123 applies. We may point out that there is no question of examining the
provisions of Section 123(l) as also its applicability because that is not the
context of the third proviso to Section 1278(l). The said proviso only makes a
reference to the goods to which Section 123 applies and not to Section 123
itself. We have already made it clear that the goods to which Section 123
applies includes gold, as specifically indicated in Section 123 (2\ of thg said
Act.
- For all these reasons, the impugned order passed by the Settlement Commission
is without jurisdiction. The same is set aside. The writ petition is allowed.
BADAR DURREZ AHMED, J
AUGUST 25,2015
SR
SANJEEV SACHDEVA, J
|