Case Note & Summary
The petitioner, M/s. Viva Herba Pvt. Ltd., a 100% Export Oriented Unit (EOU) engaged in manufacturing vegetable extracts, filed a writ petition under Article 226 of the Constitution of India challenging an order dated 2.6.2006 passed by the Settlement Commission (Customs and Central Excise), Mumbai, directing payment of duty of Rs. 33,96,718/-. The petitioner was required to obtain permission from the Development Commissioner for clearing goods to Domestic Tariff Area (DTA) and to pay excise duty under Section 3 of the Central Excise Act, 1944 and the Customs Act, 1962. Based on intelligence that the petitioner was clearing goods without permission and duty payment, the Central Excise department searched the petitioner's premises on 04.12.2003 and found that goods were cleared to DTA without permission and duty. A show cause notice was issued, and the demand was confirmed by the Additional Commissioner. The petitioner then approached the Settlement Commission, which passed the impugned order. The court held that the Settlement Commission's order is final and binding under Section 127C of the Customs Act, 1962, and cannot be challenged under Article 226. The petition was dismissed.
Headnote
A) Constitutional Law - Writ Jurisdiction - Maintainability - Article 226 of Constitution of India - Settlement Commission order under Section 127C of Customs Act, 1962 - The petitioner challenged the Settlement Commission's order directing payment of duty. The court held that the Settlement Commission's order is final and binding and cannot be challenged under Article 226 as the petitioner had voluntarily approached the Commission and accepted its jurisdiction. (Paras 2-10) B) Customs Law - Settlement Commission - Finality of Order - Section 127C of Customs Act, 1962 - The court held that once a settlement application is filed and the Commission passes an order, it is binding on the applicant and cannot be challenged in writ proceedings. (Paras 8-10)
Issue of Consideration
Whether the order of the Settlement Commission directing payment of duty can be challenged under Article 226 of the Constitution of India.
Final Decision
The writ petition is dismissed. The order of the Settlement Commission dated 2.6.2006 is upheld.
Law Points
- Settlement Commission's order is final and binding
- cannot be challenged under Article 226
- Section 127C of Customs Act
- 1962
- Section 32L of Central Excise Act
- 1944
