2007 (4) TMI 242 - HC - Central Excise

Settlement commission has held the petitioners liable to pay interest to the extent of 10% per annum having regard to the manner of evasion of excise duty - circumstances in which these cases have been decided show inexplicable non-application of mind - impugned orders are set aside to the extent it does not grant immunity from payment of excise duty u/s 11A - matters are remanded back to the Commission for reconsidering the question of immunity from interest u/s 11AB

Summary

Issues: Challenge to Settlement Commission's Order granting immunity from interest but holding petitioners liable to pay 10% interest per annum, lack of reasons in the Order, comparison with another case where complete immunity from interest was granted.

In this judgment by the High Court of Bombay, the petitioners challenged the Order of the Settlement Commission granting immunity from prosecution and penalty but holding them liable to pay 10% interest per annum on excise duty. The Commission based this decision on the petitioners accepting and depositing the entire duty liability as per the show cause notice. The petitioners argued that the Order lacked reasons for imposing 10% interest and compared their case to another where complete immunity from interest was granted to highlight the disparity. The Court noted that the Commission's reasoning for the 10% interest was related to the evasion of excise duty and found the petitioners' expectation of detailed reasons unjustified.

The Court acknowledged the lack of explanation from the Revenue's representative regarding the disparity in granting immunity from interest between the petitioners' case and the case of M/s. Goa Ispat Ltd. The Court emphasized that while absolute parity was not expected, the circumstances indicated a non-application of mind that warranted intervention. Consequently, the Court set aside the impugned orders and remanded the matters back to the Settlement Commission for reconsideration of the immunity from interest under Section 11AB, specifically in relation to the settlement applications of the petitioners. The judgment concluded with the disposal of the rule accordingly.