2015 (10) TMI 728 - HC - Central Excise

Evasion of duty - Imposition of penalty - Held that - order of the Settlement Commission on the previous occasion is lucid and leaves no room for doubt. The order of January 4, 2011 found that the petitioner company was liable to the extent of ₹ 33,44,227/- on account of additional duty. Such amount was required to be appropriated from the sum of ₹ 35 lakh that had been kept in deposit by the petitioner company. The Settlement Commission found that the petitioner company was liable to pay interest of ₹ 62,876/-, which was also required to be deducted from the deposit already made. - it is clear from the previous order in this case as to why the penalty was imposed. The petitioners were found by the central excise Commissioner to have evaded duty. The petitioners approached the Settlement Commission by offering to pay a substantial part of the additional duty and the Settlement Commission found that the petitioner company ought to be penalised to a certain extent for having evaded the duty that it was originally liable to pay. - In the light of the penalty imposed on the petitioner company herein and such penalty covering the expression concealment of particulars of his duty liability in Section 32-O of the said Act, the Settlement Commission cannot be faulted for having rejected the subsequent attempt at settlement. - Decided against assessee.

Summary

Issues:
1. Interpretation of provisions under the Central Excise Act, 1944 regarding Settlement Commission.
2. Application of penalty and waiver provisions by the Settlement Commission.
3. Bar on subsequent applications for settlement in cases of concealment of duty liability.
4. Judicial review of Settlement Commission orders.

Analysis:
1. The judgment addresses the petitioners' argument challenging the Settlement Commission's exercise under the Central Excise Act, emphasizing that the law's life is experience, not just logic. The petitioners' stance was deemed to mock the Settlement Commission's process, highlighting the importance of the provisions related to settlement under the Act.

2. The petitioner company had previously evaded paying duty and approached the Settlement Commission under Section 32E of the Act after receiving a notice. The Commission has the authority to inquire and may proceed with an application even if a report from the Central Excise Commissioner is not furnished within the specified time. Section 32F outlines the procedure post receiving an application, including the power to pass orders and waive penalties for non-disclosure of excise duty.

3. Section 32-O of the Act restricts subsequent settlement applications if a penalty has been imposed previously for concealing duty liability. The judgment clarifies that the provision's scope does not pertain to concealing duty liability during the application before the Settlement Commission, preventing repeated attempts at settlement post penalties.

4. The judgment compares the present case with a previous order where a subsequent application was rejected due to lack of clarity on penalty imposition. In this case, the Settlement Commission's order from 2011 was detailed, specifying the penalty, additional duty, and interest due, indicating the petitioner's evasion of duty. The penalty imposed covered the concealment of duty liability, justifying the rejection of the subsequent settlement attempt.

5. The judgment dismisses the petition and upholds the Settlement Commission's decision, emphasizing the clarity of the previous order and the penalty's relevance to the duty liability concealment provision. The petitioner is directed to pay costs before proceeding against the demand notice, highlighting the finality of the Settlement Commission's decision and the importance of complying with legal obligations.