Legal principle

A Settlement Commission's order passed on a full and true disclosure can be set aside only if it is contrary to the provisions of the Act and that contravention has prejudiced the party, since judicial review examines the decision-making process, not the merits of the settlement, and no mandamus can issue directing a statutory authority to act contrary to statute.

Court decision

Both writ petitions were dismissed with no costs: the Settlement Commission's Final Order No.7/2002 directing ASCL to remit Rs.1,94,00,860 as differential duty was left undisturbed, ASCL obtained no mandamus on export-obligation fulfillment or discharge of its undertaking and bank guarantee, and the Revenue's interest contention under Notification No.160/92 was also rejected.

Facts

M/s. Asianet Satellite Communications Ltd., a cable television network service provider, imported cable TV equipment valued at about Rs.9.79 crore at concessional duty under an EPCG licence (service sector, Chapter VI-A of the EXIM Policy 1992-97) carrying a US dollar export obligation to be met within five years. Having failed to fulfil the export obligation and with its further extension request rejected by the DGFT, ASCL faced a Directorate of Revenue Intelligence investigation and seizure of the imported capital goods on 3.3.2000, and the DGFT directed its banker, Federal Bank, to forfeit bank guarantee No.36/94. ASCL then went before the Customs and Central Excise Settlement Commission, which by Final Order No.7/2002 dated 13.8.2002 directed it to remit Rs.1,94,00,860 as differential duty in the course of fulfilling the export obligation. Both sides were aggrieved: the Commissioners challenged the final order in W.P.No.29008 of 2003 before the Madras High Court, while ASCL's Kerala High Court challenge (O.P.No.27493 of 2002) was transferred on Supreme Court order and renumbered W.P.No.7931 of 2006.

Key provisions

• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 127B, Customs Act, 1962 — Application for settlement of cases
• Section 127H, Customs Act, 1962 — Power of Settlement Commission to grant immunity from prosecution and penalty
• Section 127C(7), Customs Act, 1962 — Procedure on receipt of an application under Section 127B
• Section 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 112, Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 142(1), Customs Act, 1962 — Recovery of sums due to Government
• Section 127F, Customs Act, 1962 — Power and procedure of Settlement Commission
• Section 127, Customs Act, 1962 — Award of confiscation or penalty by customs officers not to interfere with other punishments