Legal principle

An application under Section 127B lies only in respect of 'a case' under Section 127A(b) — proceedings for the levy, assessment and collection of customs duty — and not for cases of mis-declaration or smuggling detected by the department involving confiscation and penalty, which fall outside the Settlement Commission's jurisdiction.

Court decision

The writ petition was allowed in favour of the Department: the Court held that the application did not fall within the ambit of the Commission's power under Section 127B, and the impugned admission order dated 15-2-2001 allowing proceedings under Section 127C was set aside. The Court further directed that the second respondent could approach the Department for refund of Rs. 11,56,805 deposited pursuant to the Commission's direction, to be considered by representation with orders within three weeks.

Facts

A Bill of Entry dated 19-7-2000 was filed in the name of M/s. Goutham Enterprises (a firm that had made no imports) through CHA M/s. Sanjay Forwarders Pvt. Ltd. declaring 300 Acer CD ROM Drives, but examination of the seized consignment revealed 736 mobile phones with chargers, 246 CD ROM drives, 35 ear phones, 6 hard disc drives and 80 fliptop covers, leading to seizure on reasonable belief of confiscation under Sections 111(d) and (m). V.C. Mohan, Managing Director of M/s. Moon Star Automation Pvt. Ltd., admitted in his voluntary statement that the goods were mis-declared for monetary gain; he was arrested and a COFEPOSA detention order was issued against him. A show cause notice dated 19-9-2000 under Section 124 was issued to Respondents 2 to 4 and M/s. Goutham Enterprises proposing confiscation under Section 111(i) and (m), penalties under Section 112(a) on Mohan and Janakiraman, and revision of the value of the goods. Respondents 2 to 4 then applied to the Settlement Commission under Section 127B, which entertained the application under Section 127C(1) by Admission Order No. 3 of 2001 dated 15-2-2001 over the Department's objection, prompting the Commissioner of Customs (Air), Chennai to file this writ petition.

Key provisions

• Section 127B, Customs Act, 1962 — Application for settlement of cases
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 127A, Customs Act, 1962 — Definitions