Settlement Commission: Section 127B – Full & True disclosure - It is manifest from a bare reading of the provision that in the application filed under Section 127B, an applicant is required to make a full and true disclosure of his duty liability, which he had failed to disclose before the proper officer. He is also required to exhaustively explain to the Settlement Commission the manner in which such liability has been incurred; the additional amount of customs duty accepted to be payable by him as also the price of such dutiable goods in respect of which he admits short levy on account of misclassification or otherwise of goods. In other words, the applicant is supposed to make a clean breast of his affairs in regard to short levy or non payment of customs duty admitted to be payable by him. The application should have been rejected by the Settlement Commission on that count itself and no relief should have been granted to the appellant. However, in view of the fact that order dated 8th February, 2001 passed by the Settlement Commission allowing the application of the appellant to be proceeded was not challenged by the Commissioner nor such a plea was urged by the Revenue before the High Court or in their reply to the present appeal, we find it difficult to reject the application at this stage. (para 13,22)
Settlement Commission: Accept the favorable and reject which is not -. Having opted to get their customs duty liability settled by the Settlement Commission, under Chapter XIVA of the Act, the appellant cannot be permitted to dissect the Settlement Commission’s order with a view to accept what is favourable to them and reject what is not. . It is manifest from the procedure laid down in Section 127C of the Act that interim order under sub-Section (1) of Section 127C as also the final order under sub-Section (7) of the said Section are to be made by the Settlement Commission after examination of the reports of the Commissioner of Customs or its Commissioner (Investigation). Obviously, these reports are submitted on the disclosures made in the application under Section 127B of the Act and, therefore, the applicant cannot be permitted to resile from his pleadings in the application at any stage of proceedings before the Settlement Commission or set up a new case before the higher Fora. (para 22)
Settlement Commission: Duty free import of ship spares - Notification No.211/83-Cus dated 23rd July, 1983 - In order to avail the benefit of exemption from whole of the duty of customs leviable under the Customs Tariff Act, 1975, twin conditions, viz., (1) capital goods, components, etc. are required for repairs of ocean going vessels, and (2) the ship repair unit should be registered with the Director General of Shipping, Government of India, are to be fulfilled. Both the conditions are cumulative and admit of no exception. Besides, under the Notification, an importer is also required to maintain a proper account of import, use and consumption of the capital goods, components, etc. imported for the aforesaid purpose in a prescribed form and failure to satisfy the Collector about their installation or consumption for the said purpose makes the importer liable to pay an amount equal to the duty payable on such goods. It is a settled position in law that Exemption Notifications have to be strictly construed. A person claiming the benefit of exemption notification, must show that he satisfies the eligibility criteria. (para 17)
Settlement Commission: Fresh grounds raised before High Court - . It is clear that since M/s Elektronik Lab. was not registered with the Director General of Shipping, they were not eligible to avail of duty exemption under the said notification, they entered into an arrangement with the appellant, a registered ship repairing unit, to import the goods for repair of ocean Thus, the sole object of the transactions was to avail of duty exemption under the said notification. Additionally, in order to claim the benefit of the Exemption Notification, the components, consumables etc. had to be used by the importer himself for repair of the vessels and not through someone else, who incidentally was not even named in the shipping bills. Moreover, proper accounts of imports, use and consumption of such goods was to be maintained by the importer, and in the event of failure to render the account for such consumption, the importer was liable to pay the customs duty as may be demanded by the Commissioner of Customs. However, once the imported goods were sold to a third party, the appellant was incapacitated from maintaining and rendering the account to the Commissioner in terms of the notification. All these factors go to show that the additional ground sought to be raised before the High Court was not only an after thought, adjudication thereon did involve investigation into facts and, therefore, the decision of the High court in not entertaining the additional ground did not suffer from any infirmity. Held that the order of the Settlement Commission did not suffer from any error, legal or factual, and, therefore, the High Court was fully justified in dismissing the writ petition. (para 21)
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