Supreme Court Divided Over Settlement Commission's Jurisdiction in Cases of Seized Goods under Section 123 of Customs Act 1962
In a recent ruling, the Supreme Court has delivered a split verdict on the issue of whether the Settlement Commission's jurisdiction under Section 127B of the Customs Act, 1962 can be invoked in relation to goods covered under Section 123 of the same Act. This decision came after considering the conflicting judgments of the Bombay High Court and the Delhi High Court. While Justice Krishna Murari supported the law laid down by the Bombay High Court, Justice Sanjay Karol opined that the bar in Section 127B prevents filing an application for settlement in relation to goods covered under Section 123. Section 123 applies to goods such as gold and watches.
The case pertained to a non-resident Indian who was arrested at Delhi International Airport on charges of trying to smuggle expensive goods through the green channel entrance to avoid paying duty. After his arrest, the petitioner filed a writ petition seeking permission to have home-cooked meals. The petitioner expressed his willingness to settle the dispute by approaching the Settlement Commission under Section 127 of the Customs Act. However, since the customs authorities did not issue notice to initiate the proceedings, the petitioner filed an application seeking the same. The authorities opposed this, arguing that the Settlement Commission does not have jurisdiction over the matter. The Supreme Court passed an ex-parte order directing the Commissioner of Customs to issue a show-cause notice to the petitioner to initiate the proceedings. However, the authorities filed an application seeking to recall the order, and the Court ultimately recalled the order after hearing both parties. The Division Bench has now asked the Registry to place the matter before the Chief Justice of India for an appropriate order.
Conflicting Judgments of High Courts on Settlement Commission's Jurisdiction Brought to Notice of Supreme Court
During the recent hearing of a matter related to the Settlement Commission's jurisdiction under the Customs Act, two conflicting judgments of the Bombay High Court and the Delhi High Court were brought to the notice of the Supreme Court. While the Bombay High Court held that the bar contained in Section 127 would not apply to specified goods under Section 123 in situations where there is no dispute about the origins of the goods, the Delhi High Court opined that no application for settlement can be made for goods covered under Section 123. The Supreme Court was urged to resolve this conflict.
Justice Krishna Murari opined that in cases of seizures within the customs area, Section 123 becomes redundant and supported the view taken by the Bombay High Court. He noted that Section 123 presumes guilt in cases of smuggling, and the burden of proof is reversed. Justice Sanjay Karol, on the other hand, referred to the bar in Section 127B, which states that no application shall be made concerning goods covered under Section 123. He noted that such an interpretation would allow a person importing goods without declaration to evade confiscation and criminal prosecution by simply taking recourse under Section 127B. The proviso in Section 127B specifies that certain categories of goods, including those covered under Section 123, are barred from the jurisdiction of the Settlement Commission. Click Here to: Download/View Related File
TAGS: Customs Act 1962 Settlement Commission Supreme Court split verdict jurisdiction Section 123 Section 127B Bombay High Court Delhi High Court conflict smuggling burden of proof accused proviso specified goods customs area seizures criminal prosecution import declaration.
