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2014 (12) TMI 652 - HC - Central ExciseRejection of application by the Settlement Commission - Power of High Court to interfere exercising jurisdiction under Article 226 - no allegation of violation of principles of natural justice - Held that - After considering all the facts, which were placed, the Commission recorded that the petitioner has not made a full and true disclosure. In the light of the said finding, this Court is not inclined to exercise its jurisdiction under Article 226 of the Constitution of India and examine the factual finding recorded by the Settlement Commission, as if, this court is the Appellate Authority over the findings of fact recorded by the Settlement Commission, by which the Settlement Commission declined to entertain the petitioner s application and directed the matter to be proceeded by the second respondent under the normal procedure under the Act. The petitioner has not challenged the order passed by the Commission on any technical grounds such as violation of principles of natural justice, failure to afford reasonable opportunity etc. The contention that the Commission has not examined the merits of the case is also not sustainable, as a bare reading of the order passed by the Commission would reveal that the merits of the case has been gone into and this Court is not inclined to go into the factual aspects of the matter, as it has to be adjudicated on merits. As long as the petitioner has failed to fulfil the twin essential tests as pointed out earlier, the application before the Settlement Commission was not maintainable and therefore, the Commission was fully justified in refusing to entertain the application. - writ petition dismissed - Decided against the assessee.
Issues Involved:
1. Challenge to the order of the Customs and Central Excise Settlement Commission dated 09.10.2012. 2. Challenge to the order-in-original dated 15.04.2014 passed by the first respondent. Issue-wise Detailed Analysis: 1. Challenge to the Order of the Customs and Central Excise Settlement Commission dated 09.10.2012: The petitioner, a private limited company engaged in the manufacture of MS Ingots, challenged the Settlement Commission's order dated 09.10.2012. The petitioner argued that they had made a true and complete disclosure of duty liability and had produced end-use certificates for the imported scrap under 64 bills of entry. However, they admitted the duty liability for the remaining 10 bills of entry and paid the duty along with interest. The Settlement Commission, after considering the comments from the second respondent, found that the petitioner had not made a true and complete disclosure and had not cooperated. Consequently, the Commission sent the case back to the jurisdictional Commissioner for adjudication under Section 32L(1) of the Central Excise Act, 1944. The Court noted that the Settlement Commission's decision was based on the finding that the petitioner had not made a full and true disclosure of the duty liability, which is a prerequisite for invoking the jurisdiction of the Settlement Commission. The Court emphasized that the Settlement Commission's role is discretionary and that it cannot be compelled to entertain all settlement applications. The Court also highlighted that the petitioner had not alleged any violation of principles of natural justice or procedural irregularities. Therefore, the Court dismissed the challenge to the Settlement Commission's order, stating that it would not interfere with the factual findings of the Commission. 2. Challenge to the Order-in-Original dated 15.04.2014: The petitioner also challenged the order-in-original dated 15.04.2014, which was passed during the pendency of the earlier writ petition (W.P.No.30162 of 2012). The order confirmed the proposal in the show cause notice dated 27.10.2009, demanding wrongly availed CENVAT credit and imposing penalties. The petitioner argued that the order was passed in violation of the principles of natural justice, as the adjudicating authority proceeded with the adjudication despite being informed about the pending writ petition. The Court acknowledged that while the Commissioner was technically justified in proceeding with the adjudication due to the absence of a stay order, it would have been fair to keep the matter in abeyance or provide the petitioner with an opportunity to secure a stay or expedite the hearing of the earlier writ petition. The Court found that the petitioner was not afforded full and effective opportunity to present their defense, which constituted a violation of the principles of natural justice. Consequently, the Court quashed the order dated 15.04.2014 and remanded the matter for fresh consideration by the Commissioner of Central Excise, Salem, with directions to afford the petitioner a personal hearing and consider all materials before adjudicating the case afresh. Conclusion: The Court dismissed the challenge to the Settlement Commission's order (W.P.No.30162 of 2012) and allowed the challenge to the order-in-original (W.P.No.15706 of 2014), remanding the matter for fresh consideration by the Commissioner of Central Excise, Salem.
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