Cus - Proceedings before Settlement Commission are not adjudicatory but are by way of settlement - Court does not sit in appeal over settlement orders passed- No interference called for in matter of penalty and fine imposed by CCESC - Petition dismissed: High Court
By TIOL News Service
NEW DELHI, OCT 20, 2015: THE allegation against the importer was that they had made importation of Christmas Lights, LED Bulbs, Decoration Lamps, etc. contrary to the provisions of Customs Act, 1962 as also the Foreign Trade Development & Regulation Act, 1992. It is also the case of the DRI that there was misuse of the IE Code.
Against the SCN dated 09.01.2015,the importer filed an application for settlement with the CCESC.
The Settlement Commission settled the case by passing the following final order -
"Assessable Value: The assessable value of the imported goods is re-determined as Rs.59,33,372/- in terms of Section 14 of the Act read with Rule 9 of the Custom Valuation Rules.
Customs Duty: The Customs Duty in this case is settled at Rs.17,06,406/- (Rupees seventeen lakh six thousand four hundred six only) against the applicant. An amount of Rs.17,06,406/- deposited by the applicant is ordered to be appropriated towards the settled amount of duty. Nothing further remains to be paid on this Count.
Fine: A fine of Rs. 5,00,000/- (Rupees five lakh only) is imposed in lieu of confiscation of the seized goods.
Penalty: Taking into account the facts and circumstance of the case, the Bench imposes a penalty of Rs. 50,000/- on the applicant and Rs 1,00,000/- (Rupees one lakh only) each on the co-applicant 1 and 2, under the provisions invoked in the SCN and grants him immunity from penalty in excess of the above amount.
Upon payment of these amounts, the seized goods shall be returned to the applicant within 15 days.
Prosecution: The Bench grants immunity to the applicant from prosecution under the Act and Rules framed there under as applicable in so far as this case is concerned."
The DRI is of the view that the order is not a fair one inasmuch as the Settlement Commission had taken a very lenient view in imposing the fines and penalties.
It is the DRI contention that "in a case of this nature" the fines should have been much higher as also the penalty amount.
The DRI have narrated their woes before the Delhi High Court by filing a Writ Petition.
And the High Court held -
"4. It is well settled that the proceedings before the Settlement Commission are not adjudicatory but are by way of settlement. This Court does not sit in appeal over the settlement orders passed by the Settlement Commission. It is, therefore, not open to a party to make a grievance with regard to an adjudicatory process when the same is foreign to the proceedings before the Settlement Commission. We do not agree with the learned counsel for the petitioner that any interference with the impugned order is called for."
The Writ petition was dismissed.
In passing: Perhaps, the essence of settlement is what needs to be remembered. Paragraph 2.32 of the final Report submitted on 24th December, 1971 by the Direct Taxes Inquiry Committee, popularly known as Wanchoo Committee is extracted as under :-
"Settlement Machinery :-
2.32 This, however, does not mean that the door for compromise with an errant taxpayer should forever remain closed. In the administration of fiscal laws, whose primary objective is to raise revenue, there has to be room for compromise and settlement. A rigid attitude would not only inhibit a one time tax-evader or an un-intending defaulter from making a clean breast of his affairs, but would also un-necessarily strain the investigation resources of the Department in cases of doubtful benefit to revenue, while needlessly proliferating litigation and holding up collections."
(See 2015-TIOL-2445-HC-DEL-CUS)
