UNION OF INDIA Vs. HOGANAS INDIA LTD

JUDGEMENT

(1.) In all the above ten Petitions, common issue has been raised with regard to the jurisdiction of the Settlement Commission constituted under Chapter XIV-A of the Customs Act, 1962. The Petitioners in the five Writ Petitions which have been filed by the Union of India representing the Customs Department, have, sought to contend that the jurisdiction of the Settlement Commission to entertain any application under Section 127B of the Customs Act, 1962 is very limited in the sense, such an application can be entertained only in case of short levy on account of misclassification or otherwise. On the contrary, the contentions of the Petitioners in the other five Writ Petitions which have been filed by the private parties is that the jurisdiction of the Settlement Commission constituted under the Customs Act is quite wider and it cannot be restricted in such a narrow manner. On this point of law, the learned Counsel appearing for the Customs Department as well as the learned Counsel appearing for private parties have made their submissions and have cited various judgments in support of their respective submissions.

(2.) Mr. Rana the learned Senior Counsel appearing for the Customs Department has sought to argue in Writ Petition No. 115 of 2004 on this issue. He pointed out factually in the above writ petition that the Respondents imported duty free raw material as input which was not at all used and could not be used in the manufacture of export products. The contention of the learned Counsel for the Customs Department is that the Respondents in the aforesaid Writ Petition No. 115/2004 had availed of various benefits under the DEEC Scheme and evaded huge payment of duty by practicing a systematic fraud over a number of years by manipulation of records. It is also contended by Mr. Rana that the Respondent had shown higher percentage of wastage i.e. almost 12% though admittedly it was not more than 4.16%. It is also the contention of Mr. Rana, that the imported goods were actually sold in violation of the conditions of Licence. Therefore, Mr. Rana the learned Sr. Counsel has pointed out that the seven show cause notices were issued to the Respondents under Sections 111(d), 111(o), 111(m), 112, 113, 114, 114A and 117 read with Section 28 of the Customs Act. Out of the seven show cause notices, admittedly, with regard to two show cause notices the amount involved was less than Rs. 2 lakhs and hence the Settlement Commission had no jurisdiction to entertain the same. It is the main contention of Mr. Rana that the companies or the persons who evade the customs duty fraudulently, cannot avail of the benefit of approaching the Settlement Commission. Mr. Rana thereafter took us through the provisions of Section 127A of the Customs Act. Section 127A(b) defines a "case", reads as under :-

(3.) Mr. Rana also brought to our notice the main provision contained in Section 127B, whereby an application for settlement of cases is made to the Settlement Commission. Section 127B reads as under :-