2016 (4) TMI 830 - HC - VAT and Sales Tax

Imposition of penalty in lieu of immune from prosecution - Petitioner has already paid sizeable amount of duty libility and interest and availed CENVAT credit - Held that - the Commission considered both the grievances of the petitioner but did not find merit in the same. When the petitioner itself had obtained central excise registration and claimed manufacturing activity, to contend that certain goods which may have been cleared by the petitioner as manufacturer but the value thereof should not be counted for considering the petitioner s SSI exemption limit, would not be correct. The argument, that the petitioner did not have any manufacturing activity, as would be borne out from the Chartered Engineer s certificate or even the panchnama drawn by the department, would be venturing into examination of factual aspects wholly impermissible in exercise of writ jurisdiction against the order of Settlement Commission. We do not find that order of Settlement Commission can be stated to be against the law or the provisions of the Central Excise Act. - Decided against the petitioner

Summary

Issues:
Challenging order of Settlement Commission on duty liability and penalties.

Analysis:
The petitioner contested an order by the Settlement Commission quantifying a revised duty liability of ?97.98 lacs and imposing penalties, offering immunity from prosecution upon payment. The petitioner had already paid ?59.99 lacs and availed CENVAT credit of ?8.24 lacs. The petitioner faced excise VAT raid revealing two sets of invoices with significant value differences, leading to a showcause notice for unpaid excise duty of ?1 core. The petitioner argued not being liable for excise duty due to engaging in trading, not manufacturing, and disputed inclusion of goods value for SSI exemption limit determination. The Settlement Commission rejected these arguments, stating that the documents failed to establish the correlation between trading goods purchased and resold, and the Chartered Engineer's certificate was deemed irrelevant.

The Settlement Commission's decision is not subject to writ petition as an appellate authority. Citing a Delhi High Court decision, the court emphasized that the Commission's order must comply with the Act's provisions. The Commission's order was upheld, stating that the petitioner's central excise registration and claimed manufacturing activity contradicted the argument that certain goods' value should not count towards the SSI exemption limit. The court found examining factual aspects impermissible in writ jurisdiction against the Settlement Commission's order, ultimately dismissing the petition.