2019 (6) TMI 1549 - Commission - Central Excise

Maintainability of Settlement Application - Rectification of certain error - applicant has finally submitted that the O-I-O had been issued on 22-2-2019 and that they had filed the settlement application prior to that and therefore the application is maintainable and not hit by provisions of Section 32(1) read with Section 31(c) of the Act - HELD THAT - A plain perusal of Section 32E of CEA reveals that for the purposes of settlement, the case must be pending before an adjudicating authority as on the date of Application under Section 32E(1) of the Act and no application under Section 32E(1) can be made unless the conditions of the Proviso clauses (a) to (d) thereof, are complied with. Further, while the statute gives some discretion to the Bench in respect of condition (a), there is no discretion in respect of other conditions. The initial applications being violative of condition (d) was statutorily defective and could not have been treated as an application in strict legal sense, as the language used in the statute is that - no such application shall be made unless . The applicants resubmitted the applications after rectifying the defects and was received by the Commission Registry on 11-6-2019. Thus, on the face of it, the date of application has to be reckoned as the date of receipt of the valid application duly complying with the requirement of the law stipulated in Section 32E(1) of the Act. Otherwise, there will be a clear violation of the language of the law as stipulated in Section 32E(1) ibid. If the applicants argument that the date of the earlier defective application be treated as the date of filing of applications in the instant case is accepted then clearly it would be contrary to the mandate of the law that no such application shall be made unless . Thus, the earlier invalid/defective application cannot be legally accepted as the application having been made under Section 32E(1) of the Act. The Bench holds that in the instant case the date of receipt of application is that date on which valid applications complying with the law were received, i.e., 11-6-2019. However, on the said date, the impugned SCN stood adjudicated vide O-in-O, dated 20-2-2019; hence, it was no more a case that could be settled. The definition of case under Section 31 of the Act, clearly stipulates that the proceeding has to be pending before an adjudicating authority on the date on which an application under Section 32E(1) of the Act is made. Applications under Section 32F(1) of the Central Excise Act, 1944 is rejected, as not maintainable and cannot be allowed to be proceeded with.

Issues Involved:
1. Admissibility of settlement applications under Section 32E of the Central Excise Act, 1944.
2. Compliance with procedural and statutory requirements for filing settlement applications.
3. Determination of the date of application for settlement purposes.
4. Impact of adjudication of the Show Cause Notice (SCN) on the maintainability of the settlement applications.

Issue-wise Detailed Analysis:

1. Admissibility of Settlement Applications under Section 32E of the Central Excise Act, 1944:
The primary issue was whether the settlement applications filed by the Applicant and Co-Applicants were admissible under Section 32E of the Central Excise Act, 1944. The applications were initially found defective and returned for rectification. The applicants resubmitted the applications, but by that time, the SCN had already been adjudicated. The Commission had to determine if the applications were maintainable given the adjudication status of the SCN.

2. Compliance with Procedural and Statutory Requirements for Filing Settlement Applications:
The initial applications were rejected due to several deficiencies, including:
- Not filed in quintuplicate as required under Rule 3(3) of the Central Excise (Settlement of Cases) Rules, 2007.
- Lack of an enclosed copy of the SCN, violating Rule 3(2) of the CE(SC) Rules.
- Incorrect declaration of the amount of duty accepted as payable, violating Section 32E(1)(c) of the Central Excise Act, 1944.
- Non-payment of accepted interest on the duty, violating Section 32E(1)(d) of the Act.

The applicants resubmitted the applications with the required documents and rectifications. However, the resubmission occurred after the SCN had been adjudicated, raising questions about the applications' maintainability.

3. Determination of the Date of Application for Settlement Purposes:
The Commission had to decide whether the date of the initial defective application or the date of the rectified resubmission should be considered for settlement purposes. The Commission emphasized that the valid date of application is when it complies with all statutory requirements. Since the initial applications were defective, the valid date was deemed to be the date of resubmission, i.e., 11-6-2019.

4. Impact of Adjudication of the Show Cause Notice (SCN) on the Maintainability of the Settlement Applications:
The SCN had been adjudicated on 22-2-2019, before the resubmitted applications were received on 11-6-2019. According to Section 31(c) of the Act, a "case" must be pending before an adjudicating authority on the date of the settlement application. Since the SCN was no longer pending due to adjudication, the applications were not maintainable.

Findings:
The Commission concluded that the initial applications were not proper under Section 32E due to non-compliance with statutory requirements, particularly the non-payment of interest on the accepted duty. The valid date of application was the date of resubmission, by which time the SCN had been adjudicated. Therefore, the applications did not meet the definition of a "case" pending before an adjudicating authority as required by Section 31(c) of the Act.

Order:
The Commission rejected the applications under Section 32F(1) of the Central Excise Act, 1944, as they were not maintainable and could not be allowed to proceed.

← Previous Next →