2011 (8) TMI 794 - HC - Central Excise

Search - Registration after search - It was contended before the Commission that after the search, a sum of Rs. 50 lacs was deposited with the Department towards duty and, therefore, the petitioner is entitled to get the benefit of approaching the Settlement Commission - Special Bench of the Commission had posed the question whether a consolidated return filed just before filing the application or along with the application by a person, who is not registered with Central Excise and had not obtained ECC number, could be considered as satisfying the condition of clause (a) of Section 32E(1) of the Act - Rule 12 of the Central Excise Rules, 2002 provides for filing of monthly return in the form specified by every assessee about their production and removal of goods and other relevant particulars, within ten days after the close of the month to which the return relates. In the case of small scale manufacturers, the return has to be filed quarterly - filing of consolidated return would not entitle to file an application before settlement commission - Petition is dismissed

Summary

Issues Involved:
Challenge to order passed by Settlement Commission regarding compliance with Section 32E(1)(a) of the Central Excise Act, 1944.

Detailed Analysis:

1. Facts and Background:
The petitioner filed a settlement application after a search was conducted on their units. The Settlement Commission found that the units were registered only after the search, and no returns were filed before that. The Commission relied on a previous decision to support its stance.

2. Contentions by Petitioner:
The petitioner argued that the Commission erred in not following a specific decision by a Special Bench, which allowed belated returns before an inquiry or show cause notice to be considered for Settlement Commission benefits.

3. Special Bench Decision:
The Special Bench clarified that consolidated returns filed just before or along with the application, without being registered with Central Excise or having an ECC Number, do not meet the conditions of Section 32E(1)(a). The Bench also addressed the scenario of returns filed after obtaining an ECC Code for the period before registration.

4. Judicial Interpretation:
The Court noted the distinction made by the Special Bench between belated monthly/quarterly returns and consolidated returns. It emphasized that consolidated returns do not fulfill the requirements of Section 32E(1)(a) of the Act.

5. Compliance with Section 32E(1)(a):
The Court analyzed the provision which mandates that an applicant must have filed returns showing production, clearance, and duty paid in the prescribed manner to be eligible for settlement. It highlighted the significance of timely and specific monthly/quarterly returns as per Rule 12 of the Central Excise Rules, 2002.

6. Final Decision:
Based on the interpretation of the law and the specific conditions under Section 32E(1)(a), the Court upheld the Settlement Commission's order as valid. The Court dismissed the writ petition, stating it lacked merit and did not warrant any costs.

This detailed analysis of the judgment highlights the key legal arguments, the interpretation of relevant provisions, and the final decision of the Court regarding compliance with Section 32E(1)(a) of the Central Excise Act, 1944.