2007 (1) TMI 575 - HC - Central Excise

Summary

Issues:
1. Petitioner's liability to pay excise duty on manufactured goods.
2. Rejection of petitioner's application by the Settlement Commission.
3. Requirement of filing returns for maintaining the application.
4. Comparison with a previous judgment regarding the filing of returns.

Analysis:
1. The petitioner, a small-scale industry manufacturing ready-made garments, claimed that its goods were not excisable, thus not liable for excise duty. However, a search in April 2002 led Central Excise Officers to believe otherwise, resulting in a show cause notice in September 2003 alleging excisable goods production.
2. The petitioner, after registering with the Central Excise Department in September 2002 and submitting returns, applied to the Settlement Commission in April 2005 for dispute resolution. The Commission rejected the application citing non-compliance with Section 32E, emphasizing the necessity of filing returns, despite registration not being a prerequisite.
3. The Commission's decision was based on the petitioner's failure to file returns for the disputed period, even though subsequent returns were submitted. The rejection was supported by the respondent and aligned with the Commission's stance on return filing for application validity.
4. Citing a prior case, the petitioner sought to rectify the non-filing of returns by committing to submit them within six weeks. The Court granted liberty to file the pending returns within the specified period, allowing the Settlement Commission to reconsider the application on its merits if the returns were filed promptly.

Conclusion:
The judgment highlighted the importance of compliance with statutory requirements, specifically the filing of returns, for maintaining applications before the Settlement Commission. By granting the petitioner an opportunity to rectify the non-compliance within a specified timeframe, the Court upheld the procedural integrity while ensuring fair consideration of the application on its merits.