Read Order: M/s Halliburton Offshore Services Inc. and ors v. The Union of India and ors

Tulip Kanth

Mumbai, June 22, 2022: Referring to section 127-B of the Customs Act, 1962 which provides for application for settlement of cases, the Bombay High Court has opined 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. 

The Division Bench of Justice K.R. Shriram and Justice Prithviraj K. Chavan said, “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. Similar view was taken by a Division Bench of Gujarat High Court in Mahendra Petrochemicals Ltd. Vs. Union of India 2010(257) E.L.T.412(Guj) and we respectfully agree with the view taken by the Gujarat High Court.”

In this case, the first Petitioner was a Company incorporated under the laws of Cayman Islands and operating in India for providing logging and perforating services to the Oil companies.Upto 1998, the petitioner-Company provided logging and perforating services to only ONGC.The petitioner-company 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). As per understanding with ONGC Customs duty if any, was borne and paid by ONGC.

Later, first Petitioner caused a private oil company Hardy Inc. to import 24 capital equipments without payment of customs duty as per notification that were then in force and on completion of Hardy Contract, the petitioner re-exported certain equipments. Later petitioner realized that what it had re-exported were equipments that were imported for its contract with ONGC and 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. Having received show cause notice, petitioner approached Settlement Commission, by way of an application u/s 127-B. . This application came to be rejected by the Commision and this order was impugned in this petition. The rejection was based on the ground that only the person who had filed a bill of entry could have filed this application and since in the bill of entry, importer was shown to be Hardy, this application could have been filed by Hardy and not petitioner. This finding was challenged by petitioner in this petition.

The Bench was of the opinion that the term any other person appearing in Section 127-B 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, not necessarily by the person who approaches the settlement commission, provided such person is served with a show cause notice charging him with duty. Observing that any other person means any other person to whom show cause notice has been issued charging him with duty and such any other person can file an application, the Bench added that 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, proceeding relating to petitioner had been pending before proper Officer, added the Bench. Thus, allowing the petition, the Bench set aside the order impugned in this petition and directed the Settlement Commission to examine the application of petitioner on merits and dispose the application on merits within 12 weeks.

0 CommentsClose Comments

Leave a comment