2019 (6) TMI 379 - HC - Central Excise

Maintainability of Settlement Commission application - Section 32-E of Central Excise Act - Settlement Application rejected as not maintainable on the ground that the petitioner had failed to make true and full disclosure of the matter in as much as it had withheld the fact of the adjudication order passed by the Additional Commissioner - HELD THAT - The Commission held that the petitioner has not only failed to make a true and full disclosure but gave a false declaration about the case pending and accordingly rejected the application. Full and true disclosure to the satisfaction of the Commission is sine qua non to consider the Settlement Application from the initiation of the proceedings till the conclusion thereof. The Commission is empowered to reject the application at any stage if it comes to its knowledge that the applicant/co-applicant has failed to make a true and full disclosure. Petition dismissed.

Summary

Issues:
1. Challenge to the order passed by the Settlement Commission, Chennai.
2. Application for settlement under Section 32-E of the Central Excise Act.
3. Rejection of the Settlement Application due to alleged failure to disclose relevant information.
4. Legal interpretation of the requirement for true and full disclosure in settlement applications.

Analysis:
1. The petitioner, a Partnership Firm manufacturing Adhesive and Self-Adhesive Tapes, challenged the order passed by the Settlement Commission, Chennai, in response to a show cause notice issued by the Additional Commissioner of Central Excise, Bangalore-III Commissionerate. The notice alleged contravention of Central Excise law and demanded excise duty, interest, and penalties.

2. The petitioner filed an application for settlement before the Settlement Commission, Chennai, under Section 32-E of the Central Excise Act. The Commission allowed the application to be processed but later rejected it, citing the petitioner's alleged failure to make true and full disclosure of relevant information, specifically the adjudication order passed by the Additional Commissioner.

3. The petitioner contended that the Settlement Application was made before the adjudication order was passed and argued that the rejection of the application post-adjudication was unjust. The petitioner's counsel emphasized the importance of voluntary compliance and settlement to avoid prolonged litigation.

4. The Court noted that the Settlement Commission rejected the application based on the petitioner's failure to disclose the adjudication order, which was considered crucial for a true and full disclosure. The Commission's decision was supported by legal precedent, including a judgment of the Hon'ble High Court of Delhi upheld by the Apex Court, emphasizing the necessity of complete disclosure for settlement applications.

In conclusion, the Court dismissed the writ petition, upholding the Settlement Commission's decision to reject the application due to the petitioner's alleged lack of true and full disclosure. The petitioner was granted liberty to pursue further legal remedies if deemed appropriate under the law.