Legal principle

Watches being goods to which Section 123 applies, the proviso to Section 127B bars recourse to the Settlement Commission for cases involving their illicit importation, though here the Bench's divergence of opinion led to reference to the Chief Justice of India, leaving no settled majority ratio.

Court decision

The extract discloses no single majority holding: the Bench recorded a 'divergence of opinion' and directed the matter to be placed before the Chief Justice of India for appropriate orders. Sanjay Karol, J. would have dismissed the interlocutory application on maintainability (no fundamental-rights infringement was made out; a statutory relief was sought under the garb of Article 32 without exhausting alternative remedies) and held on merits that, watches being Section 123 goods, the petitioner was barred from approaching the Settlement Commission, with the matter fit to be remitted to the adjudicating authorities. Krishna Murari, J. rejected the preliminary objection and held the Court could go beyond the original relief to clear the ambiguity from conflicting High Court decisions; his final merits conclusion is not contained in the extract.

Facts

The petitioner, a Non-Resident Indian, was intercepted at Delhi International Airport on suspicion of smuggling through the green channel, and a detailed examination of his person and baggage led to recovery of seven wrist watches and other high-value dutiable goods of admitted foreign origin; he was arrested for offences under Sections 132 and 135 of the Customs Act. His Article 32 writ petition originally sought only home-cooked food for undertrial prisoners, but an interlocutory application later sought directions to initiate settlement proceedings under Chapter XIV A (Section 127B) before the Settlement Commission. An ex-parte order dated 20.02.2023 directing the Commissioner of Customs to issue a show-cause notice was recalled after the Union contested the Settlement Commission's jurisdiction. A conflict between Bombay High Court and Delhi High Court judgments on the right to settlement was then argued before the Supreme Court.

Key provisions

• Section 123, Customs Act, 1962 — Burden of proof in certain cases
• Section 127, Customs Act, 1962 — Award of confiscation or penalty by customs officers not to interfere with other punishments
• Section 127B, Customs Act, 1962 — Application for settlement of cases
• Section 77, Customs Act, 1962 — Declaration by owner of baggage
• Section 132, Customs Act, 1962 —  False declaration, false documents,etc
• Section 135, Customs Act, 1962 — Evasion of duty or prohibitions
• Section 102, Customs Act, 1962 — Persons to be searched may require to be taken before gazetted officer of customs or magistrate
• Section 127H, Customs Act, 1962 — Power of Settlement Commission to grant immunity from prosecution and penalty