AMRIT LAKSHMI MACHINE WORKS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS Petition is filed under Article 226 of the Constitution of India challenging the order dated 7th/ 9th August, 2001 by which the Settlement Commissioner, Customs and Central Excise, Mumbai has declined to allow the Petitioner to pursue their settlement application under Section 127B of the Customs Act, 1962 in respect of two show cause notices. The petitioners have been so disallowed on the ground that the Petitioners have not complied with the essential requirement of section i.e. submitting evidence in respect of the imported goods such as the bill of entry. The Settlement Commissioner has, however, allowed the petitioners to pursue another settlement application in respect of another show-cause notice in respect of the 240 pcs. of bearings for which the Petitioner has filed a Bill of Entry.

(2.) THE two provisions against which the correctness of the impugned order have to be tested are Section 127(b) and Section 127A(b). Section 127B which provides for settlement of the case, reads as follows: "(1) Any importer, exporter or any other person (hereinafter referred to as the applicant in this Chapter) may, at any stage of a case relating to him make an application 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 manner 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 or otherwise of goods, to the Settlement Commission to have the case settled and such application shall be disposed of in the manner hereinafter provided: Provided that no such application shall be made unless (a) the applicant has filed a Bill of Entry, or a Shipping Bill, in respect of import or export of goods (as the case may be, and in relation to such Bill of Entry or Shipping Bill) a Show Cause Notice has been issued to him by the proper officer ; (b) the additional amount of duty accepted by the Applicant in his application exceeds two lakh rupees; 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). (2) Where any dutiable goods, books of account, other documents or any sale proceeds of the goods have been seized under Section 110, the applicant shall not be entitled to make an application under the Sub-section (1) before the expiry of one hundred and eighty days from the date of the seizure. (3) Every application made under Sub-section (1) shall be accompanied by such fees as may be specified by rules. (4) An application made under Sub-section (1) shall not be allowed to be withdrawn by the Applicant."

(3.) THE present case arises in this manner. The Petitioners were issued an advance licence dated 22nd November, 1996 by Director General of Foreign Trade for permitting duty free import of raw materials, components, etc. The Petitioners contend that they discharged the corresponding export obligation as required in terms of the conditions of the licence. The validity period of the licence was extended upto 21st May, 1999. The Petitioners signed an MOU with M/s. Nippon Bearings (India) for transfer of this advance licence. However, before the transfer was endorsed on the licence two high seas sale agreements dated 22nd March, 1999 were entered into. By these agreements, the petitioners purchased certain imported goods from M/s. Nippon Bearings (India) so that the goods could be imported duty free under the petitioners advance licence. Two Bills of Entry were filed on 3rd May, 1999 in respect of these imported consignments and they were cleared duty tree against the licence of the petitioners by M/s. Nippon Bearings (India).