The Division Bench of Bombay High Court has recently held that "Any Person" who has received a show-cause notice and who is subject to the customs duty may file an application with the Settlement Commission.
Facts
The Petitioner no.1 is a Company incorporated under the laws of Cayman Islands., whereby petitioner no.1 provided logging and perforating services to only ONGC. Petitioner no.1 caused number of logging tools for its contract with ONGC to be imported by ONGC without payment of customs duty or at a concessional rate of duty under different notifications issued u/s 25 (1) of the Customs Act, 1962 (for brevity the ‘Act’). In 1998, petitioner no.1 was awarded a contract for a private oil company, i.e., ‘Hardy Exploration and Production Inc.’ (for brevity ‘Hardy’). Said Hardy,. Relationship between petitioner and Hardy was purely contractual. There was no common beneficial ownership. Petitioner no.1 caused Hardy to import 24 capital equipments without payment of customs duty as per notification that were then in force. Said tools were permitted to be cleared without payment of customs duty on the strength of Essentiality Certificate issued by the Directorate General of Hydrocarbons, subject to re-export condition. Petitioner no.1 on completion of Hardy Contract, re-exported certain equipments. Later petitioner realised that what it had re-exported were equipments that were imported for its contract with ONGC not with Hardy. Having realized this error, petitioner decided to pay customs duty and to that extent avail of the provisions of Section 127-B of the Act. Show cause notice came to be issued to petitioner. Having received show cause notice, petitioner approached Settlement Commission, by way of an application u/s 127-B of the Act.
Contention Made
Petitioner: That Section 127-B of the Act provides for any importer, exporter or any other person who has been issued a show cause notice to file application. That proviso (a) to Section 127-B of the Act only clarifies who is applicant but provides that any person who is being served with a show cause notice charging with duty is also entitled to file application.
Respondent: that proviso (a) to Section 127-B of the Act requires applicant to have filed a bill of entry and since applicant had not filed a bill of entry, Commission [respondent no.3 ] was correct in rejecting the application.
Court Observation
The Division Bench of High Court of Bombay firstly analyzed the Section 127-B (1) of the Act and observed that Plain reading of Section 127-B of the Act, would indicate that the term “any other person” appearing in the said Section would mean any other person to whom show cause notice has been issued charging him with duty and such any other person can file an application. Use of the words “filed bill of entry” would not mean that a bill of entry in the case has to be necessarily filed by him. Only requirement is that there must be a case properly relating to applicant with reference to a bill of entry filed and in this case, case relating to petition has been pending before proper Officer.
Judgment
The Bench while rejecting the contention of the petitioner held that “any other person” appearing in Section 127-B of the Act has to be interpreted to mean in its literal sense and proviso to the said Section should be interpreted to mean that a bill of entry must be filed in a case, by such a person who is served with a show cause notice charging him with duty. Therefore, a person who may not be an Importer or Exporter can still file such an application u/s 127-B of the Act before the Settlement Commission if he is served with a show cause notice charging him with duty.
Case: M/s Halliburton Offshore Services Inc. vs The Union of India
Citation: W.P. NO. 2778 OF 2001
Bench: Justice K.R. Shriram and Justice Prithviraj K. Chavan
Decided on: 9th June, 2022.
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