2021 (9) TMI 868 - HC - Central Excise

Seeking to Issuance of directions to re-dispose the application for settlement filed by the petitioner - transparency in the matter of conducting an investigation by the Department Officials or not - grievance of the petitioner is that the two seized hard disks are not produced before the Settlement Commission for investigation - present writ petition is the second writ petition filed by the petitioner-Company - Section 32-E of the Central Excise Act - HELD THAT - For entertaining an application under Section 32-E of the Act, the application must contain full and true disclosure of duty liability, which had not been disclosed before the Central Excise officer having jurisdiction. Secondly, sub-section (1) of Section 32-L of the Act contemplates that any person who made an application for settlement under Section 32-E has not cooperated with the Settlement Commission in the proceedings before it - Unless the first condition is satisfied, the application cannot be admitted. Once the application is admitted, till the end of the proceedings, the person who submits an application has to cooperate with the Settlement Commission for the purpose of settling the issues. The twin conditions admitted in the two conditions are of paramount importance. In view of the fact that once the issues are settled before the Settlement Commission, then there is no scope for reopening by the authorities and under those circumstances, these conditions are to be considered as vital in order to protect both the interest of the Department as well as the interest of the persons, who submits an application - it is sufficient if the findings of the Settlement Commission are considered. In the present case, the Revenue could establish their position based on Investigation Report along with the primary evidences recovered from the premises of the petitioner. However, the petitioner had neither agreed to the Revenue's stand nor produced any fresh evidences for the purpose of reconsidering the issues, as the said exercise was done by the Settlement Commission pursuant to the directions issued by this Court - the scope of settlement of issues are confined with reference to the scope available under the provisions of the Act. The Settlement Commission is not empowered to go beyond the procedures contemplated as well as the scope enumerated. This Court is of an opinion that the petitioner has failed in extending their cooperation for the purpose of settling the issues by the Settlement Commission and thus, the petitioner is not entitled for the relief, as such, sought for in the present writ petition - Petition dismissed.

Summary

Issues Involved:
1. Quashing the order of the Customs and Central Excise Settlement Commission.
2. Alleged non-transparency in the handling of seized hard disks.
3. Requirement of full and true disclosure under Section 32-E of the Central Excise Act.
4. Petitioner's cooperation with the Settlement Commission.
5. Validity and authenticity of the GEQD report and the Commissioner's Investigation Report.

Issue-wise Detailed Analysis:

1. Quashing the order of the Customs and Central Excise Settlement Commission:
The petitioner sought to quash the order dated 10.10.2013 by the Customs and Central Excise Settlement Commission and requested the application for settlement to be re-disposed under Section 32-E of the Central Excise Act. The court reviewed the petitioner's grievances and the Settlement Commission's findings.

2. Alleged non-transparency in the handling of seized hard disks:
The petitioner claimed that the two hard disks seized during a search on 30.01.2006 were not produced before the Settlement Commission, leading to a lack of transparency. The court noted that the petitioner filed detailed objections about the non-transparency and non-adjudication of the hard disk contents. However, the Settlement Commission's findings indicated that the petitioner's objections were not considered in their true spirit.

3. Requirement of full and true disclosure under Section 32-E of the Central Excise Act:
The court emphasized that Section 32-E mandates an application for settlement to contain a full and true disclosure of duty liability, which had not been disclosed before the Central Excise Officer. The Settlement Commission found that the petitioner had not disclosed material facts truly and fully, leading to the rejection of the application.

4. Petitioner's cooperation with the Settlement Commission:
The court highlighted that Section 32-L(1) allows the Settlement Commission to send a case back to the Central Excise Officer if the applicant has not cooperated with the Commission. The Settlement Commission concluded that the petitioner had not cooperated, as evidenced by the rejection of the GEQD report and allegations against the officials. The petitioner’s reluctance and non-disclosure of relevant facts were significant factors in the application’s rejection.

5. Validity and authenticity of the GEQD report and the Commissioner's Investigation Report:
The court reviewed the Settlement Commission's reliance on the GEQD report and the Commissioner's Investigation Report dated 21.06.2013. The petitioner disputed the authenticity of the GEQD report, alleging manipulation by departmental officers. However, the Settlement Commission found no evidence to support the petitioner's claims. The court noted that the petitioner failed to provide contra evidence to disprove the findings of the Commissioner's report.

Conclusion:
The court concluded that the petitioner failed to extend cooperation and provide full and true disclosure of material facts, essential for the settlement process. The Settlement Commission's decision to remand the case to the Commissioner of Central Excise, Salem Commissionerate, for adjudication was upheld. The writ petition was dismissed, and no costs were awarded.