Case Law

CUSTOMS BASIC CONCEPTS 1. Are the clearance of goods from DTA to Special Economic Zone char g eabl e to expor t duty under the SEZ Act, 2005 or the Customs Act, 1962? TIRUPATI UDYOG LTD MAY 2012 DECISION  The HC on the basis of the following observations, inferred that the clearance of goods from DTA to SEZ is not liable to export duty either under the SEZ act,2005 or under the Customs Act,1962:  SEZ Act does not contain any provision for levy and collection of export duty for goods supplied by a DTA unit to a unit in a SEZ for its authorized operations.  In the absence of a charging provision in the SEZ act, export duty cannot be levied on the DTA supplier by implication.  Since both the SEZ Unit and the DTA unit are located within the territorial waters of India, section 12(1) of the customs act 1962 (which is the charging section for levy of customs duty) is not attracted for supply made by a DTAA unit to a unit located within the SEZ. Note- Karnataka HC in case of Biocon Ltd has also taken a similar view as explain in the aforesaid judgment. LEVY OF AND EXEMPTIONS FROM CUSTOMS DUTY 1. Would countervailing duty (CVD) on an imported product be exempted if the excise duty on a like article produced or manufactured in India is exempt? AIDEK TOURISM SERVICES PVT LTD. SC DECISION  SC held that CVD u/s 3(1) of the Customs Tariff Act, 1975 would be only that which is payable under the central excise act, 1944 on a like article.  Therefore, the importer would be entitled to payment of concessional/reduced or nil rate of CVD if any notification is issued providing exemption/remission of duty with respect to a like article if produced/manufactured in India. 2. Whether remission of duty is permissible under section 23 of the Customs Act, 1962 when the remission application is filed after the expiry of the warehousing period (including extended warehousing period)? DECORATIVE LAMINATES NOVEMBER 2013 HC OBSERVATIONS AND DECISION  The HC observed that section 23 s tates that only wh en th e imported g oods h av e been l ost or des troyed at any time bef ore clea ra nc e for home cons ump tion, the application for r emis sion of duty can be consider ed.  Th er ef or e, th e expr ession “at any time before clearance for home consumption” woul d mean th e time per iod as per th e initial or der during which th e goods are war eh ous ed or bef or e th e expir y of th e extended date for cl ear ance and n o t any period af ter th e laps e of th e af or es aid periods  th e cir cums tances made out under section 23 were not applicabl e to th e pr es ent case since th e d es tr uction of th e g oods or l oss of th e g oods had not occurr ed bef or e the cl ear ance f or home cons umption within th e meaning of that section.  When th e goods ar e not cl ear ed within th e period or extended period as giv en by th e auth orities, th eir continuance in th e war eh ous e will not per mit th e remission of duty under s ection 23 of the Act. CLASSIFICATION OF GOODS 1. Where a classification (under a Customs Tariff head) is recognized by the Government in a notification at any point of time, can the same be made applicable in a previous classification in the absence of any conscious modification in the Tariff? KEHIN PENALFA LTD Point of dispute: The dispute was on classification of Electronic Automatic Regulators SC DECISION  The SC observed that the CG had issued an exemption notification classifying the abovementioned goods under chapter 9032.89.  Since the revenue itself had classified the goods in dispute under chapter sub-heading 9032.89, the said classification needs to be accepted for the period prior to it. 2. Whether the mobile battery charger is classifiable as an accessory of the cell phone or as an integral part of the same? NOKIA INDIA PRIVATE LTD SC OBSERVATIONS SC decided the case in favor of the revenue and against the assessee holding that the batter y ch arg er is not a par t of th e mobile/cell phone but an access or y to it, on th e basis of th e f oll owing obs erv ations:  If the charger is part of cell phone, cell phone could not have operated without using the battery charger. However as a matter of fact charger is not required at the time of operation. Further battery in the cell phone can be charged directly from the other means like laptop without employing the battery charger.  Hence, it is nothing but at an accessory to the mobile.  As per the inf or mation availabl e on th e website of th e as s ess ee, it had r eg ularl y put th e mobil e batter y charg er in th e categ or y of an access or y which means that in the common parlance also, the mobile battery c ha rg er is und erstood as an acces sory.  Rules 3(b) of General Rules for interpretation of the first schedule of the customs tariff act,1975 can also not be applied in the assesses case as merely making a composite package of cell phone and mobile battery charger cannot be held to be composite part of the cell phone.  A particular model of Nokia make battery charger was compatible with many models of Nokia mobile phones, imparting various levels of effectiveness and convenience to users. DECISION The apex court held that mobile battery charger is an accessory to mobile phone and not an integral part of it. Further, battery charger cannot be held to be composite part of cell phone, but is an independent product which can be sold separately without selling the cell phone. 3. I) Will the description of the goods as per the documents submitted along with the Shipping Bill be a relevant criterion for the purpose of classification, if not otherwise disputed on the basis of any technical opinion or test? II) Whether a separate notice is required to be issued for payment of interest which is mandatory and automatically applies for recovery of excess drawback? CPC TEXTILES P LTD DECISION  i) The HC held that the description of the goods as per the documents submitted along with shipping bill would be relevant criterion for the purpose of classification, if not otherwise disputed on the basis of any technical opinion or test.  ii) Court, while interpreting section 75A(2) of the customs act 1962, noted that when the claimant is liable to pay excess amount of drawback , he is liable to pay the interest as well. The section provides for payment of interest automatically along with excess drawback.  No notice for the payment of interest need to be issued separately as the payment of interest becomes automatic, once it is held that excess drawback has to be repaid. VALUATIONS UNDER THE CUSTOMS ACT,1962 1. Can the value of imported goods be increased if Department fails to provide to the importer, evidence of import of identical goods at higher prices? GIRA ENTERPRISES FACTS  The appellant imported some goods from China. On th e basis of certain information obtained through a computer printout from the Customs House, Department alleged that during the period in question, large number of such goods were imported at a much higher price than the price declared by the appellant.  Department did not provide these printouts to the appellant. HC OBSERVATIONS  Supreme Court obs erved that since Revenue did not supply the copy of computer printout, which for med the basis of the conclusion that th e appellants under-valued the imported goods, the appellants obviously could not and did not have any opportunity to demonstrate that the transactions relied upon by the Revenue were not comparable transactions. DECISION  The SC held that mere existence of alleged computer printouts was not proof of existence comparable imports.  Even if assume that such printouts did exist and content thereof were true, such printout must have been supplied to the appellant and it should have been given reasonable opportunity to establish that the import transactions were not comparable.  Thus in the given case, value of imported goods cannot be enhance on the basis of value of identical goods as Department was not able to provide evidence of import of identical goods at higher prices. IMPORTATION, EXPORTATION AND TRANSPORTATION OF GOODS 1. Can the time-limit prescribed under section 48 of the Customs Act, 1962 for clearance of the goods within 30 days be read as time-limit for filing of bill of entry under section 46 of the Act? SHREEJI OVERSEAS (INDIA) PVT LTD. NOV 2013 PROVISION  Section 46 of the customs act, 1962 provides that BOE may be presented at any time after the delivery of the import manifest/import report as the case may be, but does not prescribed any time limit for the presentation of the same.  Section 48 if any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transshipped within 30 days from the date of unloading thereof at a custom station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by person having the custody thereof. DECISION The HC held that the time-limit prescribed under section 48 for clearance of the goods within 30 days cannot be read into section 46 and it cannot be inferred that section 46 prescribes any time-limit for filing of BOE. WAREHOUSING 1. Whether the issue of the imported goods warehoused in the premises of 100% EOU for manufacture/processing /production in 100% EOU would amount to clearance for home consumption? ISSUES I) Whether the entire p remis es of 100% EOU s hould be treated as a warehous e? II) Wh eth er th e impor ted g oods war eh ous ed in th e pr emis es of 100% EOU ar e to be hel d to hav e been r emov ed fr om th e war eh ous e if th e same is iss ued for manufac ture/p roduc tion/p rocessing by the 100 % EOU? III) Wh eth er iss ue f or us e by 100% EOU woul d amount to cl earance for h ome cons umption? PARAS FAB INTERNATIONAL TRIBUNAL OBSERVATIONS  It observed that as per the custom manual, premises of EOU are approved as a customs bonded warehouse under the warehousing provisions of the customs act.  It is also stated therein that manufacturing and other operations are to be carried out under customs bond.  The EOUs are licensed to manufacture goods within the bonded premises for the purpose of export.  Tribunal held that neither the scheme of the act nor the provisions contained in the manual nor there is any provision to treat such goods as deemed to have been removed for the purpose of the customs act, 1962. DECISION Issued I – The entire premises of a 100% EOU has to be treated as a warehouse if the license granted in respect of the entire premises. Issued II & III – Imported goods warehoused in the premises of a 100% EOU and used for the purpose of manufacturing in bond as authorized under section 65 of the customs act, 1962, cannot be treated to have been removed for home consumption. DEMAND AND APPEALS 1. Is the adjudicating authority required to supply to the assessee copies of the documents on which it proposes to place reliance for the purpose of re - quantification of short-levy of customs duty? KEMTECH INTERNATIONAL PVT LTD. SC DECISION The SC explain that the adjudicating authority, following the principles of natural justice, should supply to the assessee all the documents on which it proposed to place reliance. Thereafter, the assessee might furnish their explanation thereon and might provide additional evidence, in support of their claim. 2. Can Tribunal condone the delay in filing of an application consequent to review by the Committee of Chief Commissioners if it is satisfied that there was sufficient cause for not presenting the application within the prescribed period? THAKKAR SHIPPING PVT LTD. FACTS  The commissioner of customs (General), in his order-in-original drop ped the p roc eedings w hic h w ere initiated against the appella nt.  The committee of chief commissioners of customs review ed his (c om m of c ustom) ord er a nd direc ted him to apply to the Tribunal for determination of c erta in points.  The c om miss ioner, ac cordingly, mad e a n application under section 129D(4) of the act before the tribunal.  As the said applica tion could not be m ad e w ithin the p resc ribed p eriod a nd was d ela yed by 10 days, an applica tion f or cond onation of d ela y was filed with a p rayer f or c ond ona tion.  How ev er, tribunal rejected the application on the ground that Tribunal had no p ow er to cond one the dela y. LAW  As p er section 129 A(5) , the app ellant tribunal ma y ad mit an app eal af ter the expiry of releva nt p eriod referred to in section 129 A(3) or 129 A(4), if it is sa tisfied tha t there w as sufficient ca us e for not p res enting it w ith that period.  The p rovis ions of c ustoms ac t rega rding app eals, including the provision of section 129A(4) shall, so fa r as ma y be, a pply to applica tion u/s 12 9 D(4). DISCUSSION & DECISION  As stated above, Tribunal is competent to invoke section 129A(5) and condone the delay in making application u/s 129D(4).  Hence, in the present case, Tribunal can condone the delay, if it is satisfied that there was sufficient cause for not presenting the application within the prescribed period. CASE LAW The fac ts giv en in the questions are s imilar to the facts of the decid ed cas e law – ‘T ha kka r Ship ping P.Ltd’ in w hich c ourt hav e held in the sim ila r ma nner. 3. Whether extended period of limitation for demand of customs duty can be invoked in a case where the assessee had sought a clarification about exemption from a wrong authority? UNIWORTH TEXTILES LTD MAY 2014 FACTS As th e ass ess ee was pr ocuring fur nace oil f or captiv e power plant of anoth er unit, it s oug ht a clarif ica tion from the Dev elopm ent Comm issioner s eek ing as to w hether import of f ur nace oil and r eceipt of electricity would be liabl e to duty. Th e Dev elopment C ommissioner r eplied in fav our of th e ass ess ee quoting letter by Ministr y of C ommerce and th er eaf ter, th e ass es s ee claimed th e exemption. LAW As per section 28(4) , extend ed period of lim ita tion ca n be inv ok ed only w hen there is d eliberate d efault on the pa rt of the assess ee. DISCUSSION  As stated above, extend ed p eriod of limitation can be invoked only w hen there is deliberate def a ult on the pa rt of the assess ee.  How ev er, in the p res ent cas e it clea r f rom the f ac ts tha t there is no d elibera te d efault on the pa rt of ass ess ee as he has soug ht cla rif ica tion f rom the d ev elopm ent c om mis sioner rega rd ing duty lia bility. CASE LAW The fac ts giv en in the question are s imilar to the facts of the dec id ed cas e law ‘U niworth textiles Ltd’ in w hic h c ourt hav e held in the sam e m anner. 4. Can a writ petition be filed before a High Court which does not have territorial jurisdiction over the matter? NEERAJ JHANJI DISCUSSION,  Forum shopping is the practice adopted by litigants to have their legal case heard in the court which would provide most favorable decision.  In the present case, assessee has approached before HC which does not have territorial jurisdiction over the matter. CASE LAW  The fac ts of the c ase a re s imila r to the fa cts of the d ecided cas e la w ‘ NEERA J JHA NJI’ in w hic h c ourt has d isapp rov ed the prac tic e of f orum s hopping ad op ted by the assess ee, CONCLUSION  As dis cuss ed abov e, w rit petition cannot be bef or e a High C our t which does not hav e territorial jurisdiction ov er the ma tter 5. Can delay in filing appeal to CESTAT due to the mistake of the counsel of the appellant, be condoned? MARGARA INDUSTRIS LTD OBSERVATION AND DECISION  Court obs erved tha t app ella nt was not g oing to gain a nything by not filing the app eal a nd reas on for dela y in filing the app eal as given by the app ella nt was the mis tak e of its c ouns el w ho had als o f iled his p ers onal affidavit. 6. Ca n a writ petition be filed agains t an order pass ed by th e C ES TAT under s ection 9C of the Custom s Tariff Act, 19 75 ? Point of dispute - Th e Department contended that an appeal, and not a writ petition, w ould lie agains t the order pass ed by the CESTAT. LAW  It is w ell s ettled p osition of law that w rit petitions should not be enterta ined by the HC under the a rticle 22 6 of the constitution of Ind ia w hen alternate rem edies a re availa ble und er the releva nt sta tute.  The ord er of CESTAT w ould be s ubject to app eal, either to HC u/s 130 OR to the SC u/s 130E of the c ustoms act, 19 62 if the a ppeal rela tes to ra te of duty or to valua tion of g oods f or the purp os es of ass ess ment.  Section 9A(8) of the customs tariff act, 1975 spec ifically inc orp orates all the p rov isions of the custom s act, 1962 rela ting to a ppeal in their a pplica tion to the a nti-d ump ing d uty c ha rgeable u/s 9 A FACTS  Asses see filed a w rit p etition aga ins t the ord er u/ s 9 C of the c ustom ta riff a ct, 19 75 pas sed by CEST AT. DISCUSSION  A w rit is a directiv e f rom a higher court ord ering a lower c ourt to tak e a certain ac tion in acc orda nc e w ith the law. How ev er, as s tated abov e, w hen alterna te rem ed ies are ava ila ble und er the releva nt sta tute, rec ours e to writ p etition c annot be mad e CONCLUSION  As dis cuss ed abov e, as sess ee s hall f irst tak e rec ours e to the alternate rem ed y by w ay of ap peal either to HC or SC. 7. Ca n customs duty be demanded under section 28 and/or section 125(2) of the Customs Act, 1962 from a person dealing in smuggled goods when no such goods are seized from him? DINESH CHHAJER MAY 2015 LAW  As per section 28, notice of demand is issued to the person who has imported goods but failed to pay duty in accordance with the law.  As per section 125(2), notice of demand is issued to the person w hose goods are confiscated and duty demandable is in addition to the fine payable u/s 125(1) in respect of confiscated goods. FACTS  Assessee was dealing in smuggled goods though no smuggled goods were seized from the assessee.  Assessee did not import the goods. DISCUSSION  As stated above, it is seen that neither assessee has imported goods nor goods in question were confiscated.  Hence , in the present case provisions of section 28 and 125(2) are not applicable to assessee. CASE LAW  Facts of the ques tion are s imilar to the fac ts of a dec id ed case law’ DINESH CHHA JER’ in w hic h c ourt hav e held in the s am e manner. CONCLUSION As dis cuss ed abov e, c ustom d uty ca nnot be demanded from the ass ess ee. REFUND 1. Whether interest is liable to be paid on delayed refund of special CVD arising in pursuance of the exemption granted vide Notification No. 102/2007 Cus dated 14.09.2007? KSJ METAL IMPEX (P) LTD FACTS  The exem ption und er the N NO 102 /20 07 is being gra nted by wa y of ref und of sp ecial CVD.  Th e as s ess ee paid th e special CVD and applied f or the refund of th e s ame under section 27 of th e C us toms Act, 1962 along with inter es t in purs uance of th e abov e-mention ed notification. LAW  Provisions applicable to normal refund of duty a pplies to ref unds of sp ec ial CVD a rising as a result of exemp tion g ranted by way of exem ption notification.  Any d ela y in g rant of ref und would attra ct interes t as p er p rov isions of s ection 2 7A of the Customs Act,19 62. DISCUSSION  As sta ted a bove, p rov isions applica ble to norm al refund of duty a pplies to refunds of s pecial CVD.  Hence, in the p resent cas e, interest on d ela yed refunds of sp ecial CVD is p aya ble to the a ssess ee as per s ection 27A. 2. Is limitation period of one year applicable for claiming the refund of amount paid on account of wrong classification of the imported goods? PARIMAL RAY HC DECISION  The HC held that law of limitation under the customs act is applicable to duty or interest paid under the act.  How ev er, a ny s um paid into the exchequer by the assess ee is not duty or exc ess duty but is simply money paid into the account of Government.  Theref ore, the a sses see is entitled to ref und of the sum pa id by it to the cus tom a uthorities. NOTE-  In the p res ent case, m oney receiv ed by g ov ernment c ould more app rop riately be called m oney paid by mis tak en by one pers on to a nother, w hic h the other p ers on is und er obliga tion to repa y under s ec tion 72 of the Indian Contract A ct, 18 72. PROVISION RELATING TO ILLEGAL EXPORT, ILLEGAL IMPORT, CONFISCATION, PENALTY AND ALLIED PROVISIONS. 1. Whether the benefit of exemption meant for imported goods can also be given to the smuggled goods? M. AMBLAL CO. MAY 2012 SC OBSERVATION AND DECISION  The c ourt obs erv ed that one of the p rinciple f unc tions of the cus toms a ct is to c urb the ills of sm uggling in the ec onomy.  SC held that s muggled goods c ould not be c onsid ered as imp orted g oods for the purp os e of benef it of exemp tion notific ation.  If it treated as im ported goods, then there w ould hav e been no need f or tw o diff erent d efinitions 2. Is it mandatory for the Revenue officers to make available the copies of the seized documents to the person from whose custody such documents were seized? MANISH LALIT KUMAR BAVISHI HC DECISION  It was mandatory for revenue officer to ma ke ava ilable the cop ies of the s eiz ed documents.  It was party concerned who had the choice of either as king for the d ocum ents or seek ing extrac t and not the off ic er.  The d enial of rev enue was clearly a n act without jurisdiction. 3. Whether the smuggled goods can be re-exported from the customs area without formally getting them released from confiscation? HEMAL SHAH FACTS  On appeal b y H emal K. Shah, th e appellate auth ority all owed re-expor t of th e confis cated g oods. Ag ains t this or der, th e Department fil ed a revision application bef ore th e Revisionar y Auth ority under s ection 129DD of th e Customs Act, 196 2. REVISIONARY AUTHORITY’S DECISION  The Governme nt note d that the passe nger had grossly mis-declared the goods with inte ntion to evade duty and to smuggle the goo ds into India.  As per the provisions of section 80 of the Customs Act, 1962 when the baggage of the passenger contains article which is dutiable or prohibited and in respect of which the declaration is made under section 77, the proper officer on request of passenger can detain such article fo r the pur pose of being retur ne d to hi m o n his le aving I ndi a.  Since passe nger had grossly mis-declared the goos and tried to smuggle the m into I ndia, Benefit of temporary detention of baggage and re-export thereof u/s 80 cannot be allowed. 4. Can penalty f or s h or t-l anding of goods be imposed on th e s teamer ag ent of a v ess el if he files th e Impor t General M anif es t, deals with th e g oods at diff er ent s tages of s hipment and conducts all aff airs in compliance with th e pr ov isions of the Customs Ac t, 1962? CARAVEL LOGISTICS PVT LTD. NOV 2015 LAW  Section 148 prov id es tha t ag ent is held to be lia ble f or fulfillm ent of all the obliga tion including p enalties a nd c onfis cation that ca n be im pos ed on p ers on-in-c ha rge DISCUSSION In cas e of s hort-la nding of g oods, if penalty is to be imp os ed on the p ers on-in-c ha rge of conv eya nc e, it c an also be imp osed on the ag ent app ointed by him. Hence, d uly a ppointed s tea m er agent of a vessel, would be lia ble to p enalty. How ev er, the s tea m er agent if innocent, c ould w ork out his remedy against the s hipp er f or s hort-la nding. CONCLUSION Penalty c an be imposed on the steam er ag ent , but he ca n claim his rem edy from the p erson-in-c harg e ,f or s hort la nding. 5. Where goods have been ordered to be released provisionally under section 110A of the Customs Act, 1962, can release of goods be claimed under section 110(2) of the Customs Act, 1962? AKANSHA SYNTEX (P) LTD. Facts  In the instant case, an order for provisional release of the seized goods had been made under section 110A of the Act pursuant to an application filed by the petitioner in this regard.  However, the petitioner claimed unconditional release of its seized goods in terms of sections 110(2) and 124 of the Act as no show cause notice had been issued within the extended period of six months (initial period of six months was extended by another six months by the Commissioner of Customs in this case). LAW  According to section 110(2) of the customs act, 1962 the goods which have to be seized cannot be retained beyond the stipulated period of six months if no show cause notice in respect of the goods proposed to be confiscated is given before expiry of 6 months. DISCUSSION  As stated above, if no SCN is issued within the prescribed time, then the person from whose possession the goods were seized becomes entitled to return.  In the present case, since no SCN is issued within the prescribed time assessee can claim unconditional release of goods u/s 110(2) CASE LAW Facts of the present question are similar to the facts of a decided case law ‘Akansha Syntex Pvt Ltd’ in which court have held in the same manner. CONCLUSION As discussed above. The remedy of provisional release is independent of remedy of claiming unconditional release in the absence of issuance of any valid during the period of limitation or extended limitation prescribed u/s 110(2). NOTE In ‘Jayant Hansraj Shah’s case the HC took a contrary view and rejected the plea of the petitioner of unconditional release of the seized goods . 6. Whether mere dispatch of a notice under section 124(a) would imply that the notice was “given” within the meaning of section 124(a) and section 110(2) of the said Customs Act, 1962? PURUSHOTTAM JAJODIA FACTS  In the present case, SCN U/S 124(a) was dispatched by registered post on the date of expiry of stipulated period u/s 110(2) and received by the petitioner after the expiry of such period. LAW  According to section 110(2) of the customs act, 1962 where no SCN is GIVEN within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized.  According to section 124(a) of the cus toms a ct,1962 , no ord er c onf iscating any g oods or im pos ing any penalty on a ny pers ona shall be mad e unless the owner of goods or such person is GIVEN notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty DISCUSSION  M ere dispa tc h of notic e will not imply tha t notic e was ‘giv en’  Ins tead ‘giving’ of notice w ould be complete if notice reached the person concerned or having been tendered, had been refused by the concerned person.  Since in the given case SCN to the assessee was given only on last day of limitation and it was received by the assessee after expiry of limitation period, it could not be treated as ‘given’ within the stipulated period. CASELAW Facts of the g iven questions are s imilar to the fac ts of a d ecid ed cas e law ‘Purus hotta m Jajod ia’ in w hich c ourt have held in the sa m e ma nner. CONCLUSION As dis cuss ed abov e, dep artm ent was d irec ted to release the goods. T he p etition was allow ed. SETTLEMENT COMMISSION 1. In case of a Settlement Commission's order, can the assessee be permitted to accept what is favorable to them and reject what is not? SANGHVI RECONDITIONERS PVT LTD SC DECISION  Applic ation u/s 127B is ma intaina ble only if duty liability is d isclos ed.  Th e discl os ur e contemplated is in th e natur e of v ol untar y discl os ur e of concealed additional custo ms duty.  The c ourt opined that hav ing op ted to g et their customs d uty lia bility s ettled by the Settlem ent c ommission, the app ella nt could not be permitted to dissect the settlement commission’s order with a view to accept what is favorable to them and reject what is not. 2. Is judicial review of the order of the Settlement Commission by the High Court or Supreme Court under writ petition/special leave petition, permissible? SAURASHTRA CEMENT LTD Facts of the g iven question a re simila r to the fac ts of a decid ed cas e la w ‘Sauras htra Cem ent Ltd’ in w hic h c ourt hav e held that  Settlement c omm ission is s et up und er a statute f or settlement of rev enue claims.  The d ec ision of settlem ent commission is final & it also ha s p ow er to g ra nt imm unity f rom p rosecution, s ubject to satisfaction of c erta in cond itions.  Althoug h the decision of s ettlement c omm ission is final, finality clause would not exclude the jurisdiction of the HC (writ petition to HC) under article 226 of the constitution OR that of SC under article 32 or 136 of the constitution (writ petition or special leave petition to SC).  The c ourt w ould ordina rily interf ere if the settlement commission has acted without jurisdiction.  The c ourt held that, judicial review is concerned with the decision making process & NOT with decision of settlement commission. CONCLUSION As dis cuss ed abov e, judic ial rev iew of the ord er of the s ettlem ent c om miss ion by the HC or SC und er w rit p etition or s pecial petition is permissible. 3. Does the Settlement Commission have jurisdiction to settle cases relating to the recovery of drawback erroneously paid by the Revenue? UNION OF INDIA VS. SETTLEMENT COMMISSION LAW  As p er section 127 A(b) of the cus toms ac t,196 2 ‘CASE’ with ref erence to settlem ent cas es m ea n  Any p roceeding und er this ac t or a ny other act,  For the levy, ass essm ent a nd c ollection of exc ise duty/c ustom duty,  Pend ing before a djudicating a uthority on the d ate on w hic h a n application f or s ettlement is mad e.  ‘Duty d ra wba ck’ is a n exp ort inc entive s c heme w here d uties pa id on a ny imp orted materials or excisa ble ma terials or input servic es is allow ed as ref und to the exp orter. DISCUSSION  As sta ted a bove, d raw bac k is nothing but remis sion of d uty on a cc ount of s tatutory prov isions in the act.  Consid ering the d efinition of ‘CA SE’, s ettlem ent c om mission has jurisdiction to d eal with question relating to the rec ov ery of dra wback erroneously pa id by rev enue. MISCELLANEOUS PROVISIONS 1. Whether any interest is payable on delayed refund of sale proceeds of auction of seized goods after adjustment of expenses and charges in terms of section 150 of the Customs Act, 1962? VISHNU M HARLAKA NOV 15 HC OBSERVATIONS  Th e High Cour t obs er v ed that th oug h no per iod was s tipulated in th e or der of the S ettl ement C ommiss ion for th e gr ant of ref und, th e entir e exer cis e ough t to have bee n carried out within a reas onable period of time.  All statutor y powers hav e to be exer cis ed within a reas onabl e period ev en wh en n o specific period is pr es cribed by th e pr ovision of law.  Th e High C ourt noted th at th er e was abs ol utel y no reas on or justifica tion f or the d ela y in pa ym ent of bala nc e sale p roc eeds. DECISION  Th e High Cour t h eld th at Depar tment cannot plead that th e C us toms Act, 1962 pr ovides f or th e payment of inter es t onl y in r es pect of r ef und of duty and inter est and h ence, th e ass es s ee would not be entitled to inter es t on th e balance of th e sale pr oceeds which wer e dir ected to be paid by the S ettl ement C om mis s ion.  Thus, interest f rom the da te of prop osal f or sa nc tioning the refund of the sales p roc eeds of sales auction of s eiz ed goods after a djustm ent of exp ens es a nd c ha rges in term s of s ec tion 15 0 till the da te of ref und w ould be p ayable. 2. Can a former director of a company be held liable for the recovery of the customs dues of such company? ANITA GROVER LAW  As p er section 142 of the c ustoms ac t, 196 2 rea d along w ith the Custom s Rules, 19 95, Central Gov ernm ent c ould rec over dues belonging only to def aulter. FACTS  A demand notice was raised against the director of a company in respect of the customs duty payable by a company of which she was a former director. DISCUSSION  As sta ted a bove, it was only the d efaulter against whom steps mig ht be tak en f or the rec ov ery of d ues.  In the p res ent case, it was the c ompa ny w ho w as d efaulter.  Hence, p rov ision of section 142 is applica ble to c ompany. CASE LAW Facts of the g iven question a re simila r to the fac ts of a decid ed cas e la w ‘A NIT A G ROVER’ in w hic h court hav e held in the same ma nner. CONCLUSION As discussed above, custom dues of company cannot be recovered from its directors. NOTE HC has taken a similar view in case of ‘VANDANA BIDYUT CHATTERJEE’.