2002 (11) TMI 464 - Commission - Central Excise

Issues Involved:
1. Definition and applicability of 'case' under Section 31 of the Central Excise Act, 1944.
2. Demand of interest and penalty under Rule 96ZQ(5) of the Central Excise Rules, 1944.
3. Admissibility of applications to the Settlement Commission.
4. Relevance of previous case laws and judicial decisions.

Issue-wise Detailed Analysis:

1. Definition and Applicability of 'Case' under Section 31 of the Central Excise Act, 1944:
The Settlement Commission examined whether the applications satisfied the definition of 'case' as per Clause (c) of Section 31 of the Central Excise Act, 1944. The Bench enquired if the proceedings related to the demand of duty, assessment, and collection of duty, and whether the applications contained any additional duty disclosure not disclosed before the proper officer as required under Section 32E(1) of the Act. The Advocate conceded that the proceedings did not relate to the demand of Central Excise Duty but to the demand of interest and penalty. The Commission concluded that the applications did not meet the statutory requirements for a 'case' under Section 31, as they were not related to the levy, assessment, or collection of duty.

2. Demand of Interest and Penalty under Rule 96ZQ(5) of the Central Excise Rules, 1944:
The applicants were required to pay duty in advance by a prescribed date, failing which they were liable to pay interest at 36% p.a./24% p.a. on the outstanding amounts and a penalty equal to the Central Excise duty outstanding. The scrutiny of RT12 returns revealed that the applicants had paid the duty amounts after the prescribed dates, leading to the issuance of show cause notices demanding interest and proposing penalties. The competent authority adjudicated these notices, ordering the recovery of interest and imposing penalties. The applicants appealed these orders, which were pending with the Commissioner of Central Excise (Appeals) Surat.

3. Admissibility of Applications to the Settlement Commission:
The Commission considered whether the applications were admissible for settlement. The Advocate argued that the issue of show cause notices for the imposition of penalty should be construed as a confirmation of the duty debited after the due date, allowing the applicants to approach the Settlement Commission. However, the Commission found that the show cause notices did not demand duty or propose to confirm the belated payment of duty, making the applications inadmissible. The Commission emphasized that settlement could only be resorted to if there was a dispute between the assessee and the Department regarding the levy, assessment, or collection of duty, which was not the case here.

4. Relevance of Previous Case Laws and Judicial Decisions:
The Advocate referred to several case laws to support the admission of the applications, including decisions from the Hon. CEGAT, the Principal Bench of the Customs & Central Excise Settlement Commission, and the Apex Court. However, the Commission found these references irrelevant or inapplicable to the present case. For instance, the decision in Jay Yuhshin Ltd v. CCE was deemed irrelevant as it related to a situation where a notice was issued under Section 11A(1) even after the payment of duty beyond the relevant date, which was not invoked in the present case. Similarly, the decision in UOI v. Onkar S. Kanwar, related to the Kar Vivad Samadhan Scheme, was found inapplicable as it governed a different scheme. The Commission also dismissed the relevance of the decision in Re: Bronze Powder Pvt Ltd., as there was no dispute regarding duty liability in the present case.

Conclusion:
The Commission concluded that the applications did not satisfy the definition of 'case' under Section 31 of the Central Excise Act, 1944, as the proceedings were not related to the levy, assessment, or collection of duty but only to the demand of interest and penalty. Consequently, the applications were rejected in terms of sub-section (1) of Section 32F of the Central Excise Act, 1944.

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