2016 (6) TMI 822 - HC - Central Excise

Challenge to the common order passed by the Settlement Commission under the Customs and Central Excise Act - as per the order due to lack of cooperation on the part of the applicant, the matter has to be sent back to the Commissioner of Customs for adjudication. - Held that - The window given under the Customs Act by inserting chapter XIVA by Finance Act 1998, is to give a reprieve to an applicant who comes forward before the Commission by making full and true disclosure and this Commission was set up on similar lines, as that of the Commissions already functioning under the Income Tax Act. On a perusal of the facts as set out in the impugned order as well as on perusal of the materials placed on record, it is evidently clear that the petitioner failed to cooperate in the disposal of the matter. The reply which is expected to be given by an applicant is a simple Yes or No . In the event, if the reply is Yes , he has to disclose about the case, which is pending. However, the reply given by the petitioner is not a straight forward reply, but by stating that pertaining to the show cause notice, which is subject matter of settlement application, no appeal has been filed, is pending before the Appellate Authority or Tribunal or Court and this is the first time, the petitioner has filed the Settlement Application before the forum. The reply given obviously does not answer the specific query in a direct fashion. The letter dated 18.12.2014, given by the petitioner to the Commission makes it manifestly clear that the petitioner had no intention to co-operate with the disposal of the matter by the Commission. Therefore, the Commission after recording elaborate reasons held that the facts and circumstances clearly show lack of cooperation. There is no valid ground made out by the petitioner to interfere with such a finding. - order of the commission sustained - Decided against the petitioner.

Summary

Issues Involved:
1. Validity of the Settlement Commission's order rejecting the application due to alleged lack of cooperation.
2. Impact of pending CBI investigation on the maintainability of the application before the Settlement Commission.
3. Whether the petitioner was given a fair opportunity to present their case.

Detailed Analysis:

1. Validity of the Settlement Commission's Order:

The petitioner challenged the common order passed by the Settlement Commission under the Customs and Central Excise Act. The Commission had rejected the application due to the petitioner's lack of cooperation. The petitioner argued that the Commission did not afford them an opportunity to present their case and erroneously passed the impugned order without considering the facts and circumstances. The petitioner requested that the order be set aside and the matter remanded back to the Commission. The court noted that the Commission had followed the procedure prescribed under Section 127C of the Act and had given the petitioner multiple opportunities to cooperate, which they failed to utilize. The court emphasized that the Commission's finding of non-cooperation was based on facts and the petitioner's conduct, and thus, there was no valid ground to interfere with the Commission's order.

2. Impact of Pending CBI Investigation:

The Commission had received information from the Commissioner of Customs that the CBI had registered a case against the petitioner and others, and the matter was taken cognizance by the Competent Court. The petitioner argued that the CBI summons were issued after the Settlement Applications were filed and admitted, and no case was pending in any other Court at the time of filing the application. The court observed that the Commission had called upon the petitioner to furnish comments on the maintainability of the application in light of the CBI investigation. The petitioner admitted the CBI summons but stated that no case was pending in any other Court. The court noted that the Commission did not pass any orders specifically accepting the petitioner's plea but fixed a hearing date, which the petitioner failed to attend. The court held that the Commission's decision to send back the matter for adjudication was justified given the petitioner's lack of cooperation and the pending CBI investigation.

3. Fair Opportunity to Present the Case:

The petitioner contended that they were not given a fair opportunity to rebut the report submitted by the Commissioner, as they were not aware of it until they perused the impugned order. The court noted that the petitioner had multiple opportunities to present their case and cooperate with the Commission, including two scheduled hearings which the petitioner failed to attend. The court emphasized that the petitioner's conduct in seeking adjournments and not providing straightforward replies indicated a lack of intention to cooperate. The court concluded that the petitioner was given ample opportunity to present their case, but their actions demonstrated non-cooperation, justifying the Commission's decision to reject the application.

Conclusion:

The court dismissed the writ petitions, upholding the Settlement Commission's order. The court found that the petitioner had not made out any case to interfere with the Commission's findings and that the petitioner's conduct showed a clear lack of cooperation. The court also noted that an identical order had been tested and upheld in a previous case involving the petitioner's spouse. Consequently, the writ petitions were dismissed with no costs, and connected miscellaneous petitions were also closed.