Case Note & Summary
The petitioners, M/s Petrosolv India Co. and its partner, filed a writ petition challenging an order dated 13 July 2006 passed by the Settlement Commission rejecting their application dated 20 July 2006 filed under Section 127B of the Customs Act, 1962 read with Section 32E of the Central Excise Act, 1944. The allegation against the petitioners was that they had effected fraudulent export. The goods were seized on 30 November 2005, and the application was filed on 28 April 2006. The Settlement Commission rejected the application mainly on the ground that it was premature, as no show cause notice had been issued by the Revenue indicating the amount of additional duty levied. The Commission observed in paragraph 6 that the applicants were free to make fresh applications after receiving a show cause notice. The petitioners submitted that they did not get a personal hearing before the Settlement Commission. It was also noted that petitioner No.1 had been detained under COFEPOSA by an order dated 5 May 2006, which was confirmed by the Division Bench on 27 July 2006. The learned counsel for the petitioners argued that it was not necessary for the petitioners to wait for 180 days to file their application under Section 127B(1) of the Customs Act. The court examined sub-section (2) of Section 127B and held that the application can be filed only after the issuance of a show cause notice, and sub-section (2) does not require waiting 180 days but requires the application to be filed before adjudication. The court found no merit in the petition and dismissed it, upholding the Settlement Commission's order.
Headnote
A) Customs Law - Settlement Commission - Premature Application - Section 127B Customs Act, 1962 read with Section 32E Central Excise Act, 1944 - Petitioners filed application before issuance of show cause notice - Settlement Commission rejected as premature - Held that application under Section 127B(1) can be filed only after show cause notice is issued, and sub-section (2) does not require waiting 180 days but application must be filed before adjudication - Petition dismissed (Paras 2-6).
Issue of Consideration
Whether the Settlement Commission was justified in rejecting the petitioners' application under Section 127B of the Customs Act, 1962 read with Section 32E of the Central Excise Act, 1944 as premature when no show cause notice had been issued.
Final Decision
The High Court dismissed the writ petition, upholding the order of the Settlement Commission rejecting the application as premature.
Law Points
- Settlement Commission can reject application as premature if no show cause notice issued
- Section 127B Customs Act
- 1962
- Section 32E Central Excise Act
- 1944
- no requirement to wait 180 days
