2017 (11) TMI 534 - HC - Central Excise

Evasion of duty - jurisdiction of Settlement Commission - Held that - This Court, would entertain the Petition under Article 226 arising out of the order of the statutory Tribunal, only if it is found that the view taken by the Tribunal is either perverse or impossible. No perversity or impossibility is noticed in the order of the learned Tribunal - The learned Tribunal has given cogent and sound reasons as to why it felt it appropriate to entertain the grievance of Respondent No.1 - petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to order passed by Settlement Commission allowing application for settling the matter.

Analysis:
1. The Petition challenged the Settlement Commission's order allowing Respondent No.1's application for settling the matter. Respondent No.1, engaged in manufacturing "Polyester Viscose Yarn," faced allegations of evasion of Central Excise duty. The Officers found discrepancies in the RG1 Register and clearances made against various invoices, indicating duty evasion.

2. A show cause notice was issued demanding Central Excise duty and invoking penal provisions. Respondent No.1 admitted liability, paid the short amount with interest, and applied to the Settlement Commission under Section 32E of the Central Excise Act. The Petitioners opposed the application, but the Commission granted settlement, providing immunity from penal action while directing payment of interest.

3. The Petition contended that the Settlement Commission erred by not considering a judgment from the Chennai High Court and argued that Section 32E could not apply due to non-filing of returns. Respondent No.1's Counsel defended the Commission's order. The Tribunal distinguished the Chennai High Court judgment related to smuggling, stating the present case did not involve smuggling.

4. The Tribunal found Respondent No.1 was filing returns and noted that even if returns were not filed, the Commission could entertain the application under Section 32F. The Tribunal's jurisdiction to entertain applications, even in cases of non-filing of returns, was supported by legal precedents emphasizing the intent of encouraging disclosure of duty liability and granting immunity from penal action.

5. Referring to a Division Bench case, the Court highlighted the legislative intent to uncover frauds, collect revenue, and encourage full disclosure of duty liability. The Tribunal's decision to entertain Respondent No.1's grievance was found to be reasonable and well-founded, with no evidence of perversity or impossibility. Thus, the Petition was rejected, and the Rule discharged.