2010 (3) TMI 71 - HC - Central Excise

Order of settlement commission power to assessee the value of goods - Settlement Commission after considering the rival claims of the parties passed an order under section 32F(5) of the 1944 Act directing the assessee to pay amount of Rs.31, 88, 629/- towards duty with interest redemption fine and penalty but granted immunity from prosecution and waived part of interest redemption fine and penalty. It was further held that the revenue was entitled to return the amount of Rs.35, 38, 521/- being the value of goods which were seized after deducting redemption fine in respect of the said goods. - The revenue has filed this petition on the ground that the Settlement Commission could not assess the value of goods. held that - In view of undisputed facts that the goods of the assessee were seized and were neither confiscated nor returned there is no illegality in the order of the Settlement Commission in directing return of value of goods while determining liability of the assessee decided in favor of assessee

Summary

Issues:
Quashing of order by Customs and Central Excise Settlement Commission under the Central Excise Act, 1944.
Jurisdiction of Settlement Commission to assess the value of seized goods.

Analysis:
The petition sought the quashing of an order passed by the Customs and Central Excise Settlement Commission under the provisions of the Central Excise Act, 1944. The respondent, a manufacturer of Snuff, was found to have cleared stocks clandestinely after a search operation. The department issued a Show Cause Notice demanding duty and proposing confiscation of seized goods and penalty. The assessee moved an application before the Settlement Commissioner under section 32E of the 1944 Act. The Settlement Commission, after considering the claims of both parties, directed the assessee to pay a reduced amount towards duty, with immunity from prosecution and waived part of the penalty. The revenue filed a petition challenging the Settlement Commission's authority to assess the value of seized goods.

Upon hearing both parties, the key issue raised was whether the Settlement Commission had the jurisdiction to order the return of the value of seized goods. The petitioner contended that since no adjudication had taken place as per a previous court order, the Commission could not direct the return of the value of goods. However, the assessee argued that in the absence of adjudication and the non-return or confiscation of goods, the Commission was justified in following the court's order by directing the return of the goods' value as part of its decision. The court found that as the goods were neither confiscated nor returned, the Settlement Commission acted within its authority under Section 32F (5) read with Section 32I of the Act to order the return of the value of goods while determining the assessee's liability.

In light of the undisputed facts and legal provisions, the court concluded that there was no illegality in the Settlement Commission's decision to direct the return of the value of goods. The court dismissed the petition, upholding the Settlement Commission's order as valid and within its jurisdiction.