2000 (10) TMI 961 - Commission - Central Excise

Issues Involved:
1. Definition and applicability of the term "Assessee" under Section 31(a) of the Central Excise Act.
2. Compliance with the provisions of clause (a) of the first proviso to Section 32E(1) by Oriflame and its Directors.
3. Permissibility of composite or joint application under Sections 32E and 32F.
4. Interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985, as per the third proviso to Section 32E(1).

Detailed Analysis:

Issue I: Definition and Applicability of "Assessee"
The term "Assessee" is defined in Section 31(a) of the Central Excise Act as any person liable for the payment of excise duty. This includes producers, manufacturers, and registered persons. The definition extends to individuals who are in charge of the affairs of a company, such as Directors. The judgment referenced the case of H.L. Mark v. Union of India, where it was held that any Director involved in fraud or tort is personally liable. This principle was applied to establish that Directors of Oriflame, being involved in the company's operations, fall within the definition of "Assessee."

Issue II: Compliance with Clause (a) of the First Proviso to Section 32E(1)
The proviso requires that the applicant must have filed prescribed returns to be eligible for settlement. The learned Advocate argued that Oriflame should be considered to have filed returns through its job worker, Silver Oak, which was treated as a dummy by the Department. The Department contended that Oriflame did not file returns for a specific period, thus disqualifying it from settlement. The Commission concluded that since Oriflame was deemed to have filed returns via Silver Oak, the requirement was satisfied.

Issue III: Permissibility of Composite or Joint Application
The judgment analyzed whether the scheme under Sections 32E and 32F allows for a composite application by all co-noticees. The learned Advocate argued that the term "Case" in Section 31(c) includes all proceedings related to duty assessment, penalty, and interest, thus allowing all co-noticees to apply jointly. The Commission agreed, stating that the scheme of the Act envisages dealing with the case as a whole, including all co-noticees, to ensure comprehensive settlement and avoid multiple proceedings.

Issue IV: Interpretation of Classification of Excisable Goods
The third proviso to Section 32E(1) bars applications solely for the interpretation of the classification of excisable goods. The learned Advocate and the Department's representative agreed that the case involved the application of Chapter Note IV to Chapter 33, which deems certain activities as manufacturing. The Commission held that this did not constitute a pure classification issue, thus allowing the application to proceed.

Conclusion:
The application by Oriflame and its Directors was admitted for settlement. The applicants were directed to pay the balance of the additional duty within 30 days and provide proof of payment. The jurisdictional Commissioner was instructed to credit the already deposited amount under the proper Head of Account towards the admitted duty. The judgment emphasized the need for a liberal and comprehensive approach in settlement cases to facilitate voluntary compliance and avoid prolonged litigation.

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