SEVEN SEAS PETROLEUM (P) LTD Vs. CUSTOMS

JUDGEMENT

(1.) Both the writ petitions are filed challenging the orders of the Settlement Commission. The petitioner in these cases imported superior kerosene oil through the port of Cochin. The imports are under the Duty Exemption Passbook Licences (DEPB) and the licences were issued originally in favour of M/s OM Corporation, Mumbai and M/s Global Exports, Mumbai. The said licences were purchased through an agent-Bhagyalakshmi Exports, Chennai and the Telegraphic Release Advice (TRA) was issued for the importation of the goods in question. The customs department, on verification, found that the TRA used for clearance of kerosene imported by the petitioner was false and was not issued by Nava Sheva Customs House, Mumbai and, therefore, a show cause notice was issued inter alia demanding duty and other liabilities. At the stage of show cause notice, the petitioner filed an application before the Settlement Commission and the matter was admitted and the petitioner-Company paid the entire duty liability as per show cause notice as per the direction of the admission order and pleaded for immunity from interest, penalty and prosecution. The Settlement Commission, after hearing the department and after considering the conduct of the petitioner in surrendering the balance DEPB licence and on noticing the error, came to the conclusion that the petitioner should be given the benefit of settlement of the case by granting immunity from prosecution and penalty under the provisions of the Customs Act and the duty paid was acknowledged and discharged the petitioner from further payment of duty. So far as the interest is concerned, it was fixed at 10% per annum on the amount settled above. The operative portion of the said order reads as follows:-

(2.) Per contra, Mr. K. Ravindranath, learned Senior Central Government Standing Counsel for the respondents relied upon a decision of the Supreme Court in Sanghvi Reconditioners Private Limited v. Union of India and others, 2010 2 SCC 733 to contend that the order of the Settlement Commission cannot be dissected and a part of the order alone cannot be challenged. In the said judgment, the Supreme Court held as follows:-

(3.) This Court is in agreement with the plea taken by the respondent's counsel based on the above decision for the following reasons. The Settlement Commission has thought it fit to accept the duty liability which was not paid in respect of the goods imported. It was subsequently demanded under the show cause notice together with interest and penalty. The Revenue is entitled to recover the duty that has not been paid in respect of the goods imported and along with the claim for duty, interest is also payable under the provisions of the Act. The Settlement Commission has, in its discretion, accepted the voluntary payment of duty and has taken into consideration the relevant factors to impose interest for the duty that was not paid at the time of import of the goods. The Settlement Commission is entitled to pass appropriate orders on interest at its discretion.