2018 (4) TMI 1030 - HC - Central Excise

Maintainability of application before Settlement Commission - Clandestine removal - parallel invoices - only contention of petitioner is that the Settlement Commission in this case completely bypassed the mandatory requirements stipulated in law and entertained the application - Principles of Natural Justice - Held that - It is evident from the communication copy of which is at Exhibit C at page 80 dated 7th January 2005 that this Commissionerate complies with section 32F(1). It is a report which has to be forwarded to the Settlement Commission by the Principal Commissioner of Central Excise where an application for settlement is allowed or deemed to have been allowed to be proceeded with under sub-section (1) of section 32F. The facts as reflected from the records and to be found in the order of the Settlement Commission therefore do not permit the petitioner to raise any contention and of the nature that the impugned order contravenes the provisions of law or is in breach of the principles of natural justice - this argument is purely an afterthought. It is in the peculiar facts and circumstances of the case that the Commission proceeded with and decided the matter. There was never any objection raised much less serious for all this was done in the presence of the Revenue officials. The whole matter was allowed to be proceeded with and was brought to an end with the consent of the Revenue officials. Petition dismissed.

Summary

Issues:
Challenging Settlement Commission's order dated 27th January, 2005.

Analysis:
The petition filed by the Revenue challenges the Settlement Commission's order alleging the second respondent's involvement in maintaining parallel invoices for TMT Bars, suspecting clandestine removal of finished goods without excise duty payment. The show cause notice demanded ?1,05,35,493 under sections 11A(1) and 11AC of the Central Excise Act, 1944. The second respondent admitted duty liability of ?71,75,961 and sought immunity from fines, penalties, and interest. The Assistant Commissioner opposed the application and claimed the Department should be allowed to engage a special counsel. The Settlement Commission entertained the application and revised the duty liability to ?91,38,562, which was paid.

Regarding the Settlement Commission's jurisdiction, Section 32E of the Central Excise Act, 1944 allows an assessee to apply for settlement, disclosing duty liability and additional excise duty payable. Once the application meets requirements, the Commission issues a notice for explanation within 7 days, deciding within 14 days whether to proceed or reject the application. In this case, the second respondent's application was duly served and the Commissionerate complied with forwarding the necessary report under section 32F(1).

The Revenue's objection to the Settlement Commission's decision was deemed too late, as they allowed the application to proceed by forwarding their report. The presence of both parties during the hearing implied consent, preventing the Revenue from later claiming non-compliance with legal provisions or principles of natural justice. The Court upheld the Settlement Commission's decision based on the facts and circumstances of the case, dismissing the writ petition without costs.

In conclusion, the Court found no merit in the writ petition challenging the Settlement Commission's order, as the Revenue's consent during the proceedings prevented any valid objections post-decision. The Court upheld the decision based on the specific circumstances of the case, refusing to interfere in its discretionary jurisdiction under Article 226 of the Constitution of India.