2012 (10) TMI 1014 - HC - Central Excise

The lack of willingness on the part of the petitioner to make the payments as per the orders of the competent authorities make The appeal therefore to be rightly dismissed.

Summary

Issues Involved:
1. Settlement Commission orders under section 32-F(7) of the Central Excise Act, 1944.
2. Immunity from interest, penalty, and prosecution granted by the Settlement Commission.
3. Withdrawal of immunities by the Settlement Commission.
4. Conclusiveness of the Settlement Commission's orders under section 32M.
5. Adjudication of original show cause notices post withdrawal of immunities.
6. Compliance with orders for pre-deposit of penalty and interest.

Issue-wise Detailed Analysis:

1. Settlement Commission Orders under Section 32-F(7):
The writ petitions arose from the orders passed by the Customs and Central Excise Settlement Commission under section 32-F(7) of the Central Excise Act, 1944. The Settlement Commission settled the excise duty for M/s Jagat Textiles at Rs. 31,07,774/- and for M/s Uma Textiles at Rs. 8,44,229/-. Immunities from interest, penalty, and prosecution were granted based on full and true disclosure and cooperation by the petitioners.

2. Immunity from Interest, Penalty, and Prosecution:
The Settlement Commission granted immunity from interest in excess of 10% per annum and immunity from penalty and prosecution under the Central Excise Law. The immunity was conditional upon full compliance with the Settlement Commission's order, including the payment of the settled duty amount.

3. Withdrawal of Immunities:
The Settlement Commission withdrew the immunities granted to the petitioners when they failed to comply with the payment conditions. The immunity withdrawal was automatic under section 32K(2) of the Act due to non-payment of the specified sums. The petitioners' subsequent applications for total immunity from interest and penalty due to financial constraints were dismissed by the Settlement Commission.

4. Conclusiveness of the Settlement Commission's Orders under Section 32M:
Section 32M of the Act provides that every order of settlement under section 32F(7) shall be conclusive and no matter covered by such order shall be reopened in any proceeding under the Act or any other law. The High Court emphasized that the Settlement Commission's orders were conclusive and could not be reopened, and the subsequent Miscellaneous Applications filed by the petitioners were not competent.

5. Adjudication of Original Show Cause Notices Post Withdrawal of Immunities:
After the withdrawal of immunities, the petitioners contended that their matters stood revived to the stage of the original show cause notices. However, the adjudicating authority held that since the duty was already settled by the Settlement Commission, the only remaining issues were interest and penalty. The High Court clarified that the conclusiveness of the Settlement Commission's order under section 32M applied, and the duty amount settled could not be reopened.

6. Compliance with Orders for Pre-deposit of Penalty and Interest:
The petitioners failed to comply with the orders for pre-deposit of penalty and interest as directed by the Tribunal. Despite extensions, the petitioners did not deposit the required amounts, leading to the dismissal of their appeals for non-compliance. The Tribunal's discretion to dismiss the appeals was upheld by the High Court, which found no error in the orders confirming the penalty and interest.

Conclusion:
The High Court dismissed all four petitions, upholding the orders of the Settlement Commission, the adjudicating authority, and the Tribunal. The conclusiveness of the Settlement Commission's orders under section 32M was reaffirmed, and the petitioners' failure to comply with payment conditions resulted in the withdrawal of immunities and the imposition of penalties and interest as per the provisions of the Act. The Rule was discharged with no order as to costs.