9911796707
TMI Blog2010 (1) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The facts as are necessary for the adjudication of the present, writ, petition may be adumbrated as follows:- (a) the Petitioner is a manufacturer of readymade Khaini under the brand name 'Madhu' falling under Chapter 24 of the 1st Schedule to the Central Excise Tariff Act, 1985 and is registered with the concerned Central Excise Authorities. (b) Based on information that the Petitioner was involved in the clandestine clearance of goods without payment of central excise duty, the factory premises of the Petitioner, offices/godowns of certain transporters, railway booking agents, raw material suppliers and some of the dealers of the Petitioner situated in Karnataka/Kerala were searched by the Directorate General Central Excise Intelligence (hereinafter referred to as 'the DGCEI'). (c) During the follow up action various records/documents were resumed from different places and seizures of unaccounted finished goods along with unaccounted raw material took place. The Petitioner was issued with a demand cum show cause notice (in short 'the SCN') by the Additional Director General, DGCEI, New Delhi on 12th October, 2006. The SCN proposed a demand of duty of Rs. 17,65,95,521/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timation both to the Commissioner and the Revenue. Penalty: The Bench imposes penalty of Rs. 3,00,00,000/- under the provisions invoked in the SCN on Applicant No. 1. Full immunity from penalty is granted to Applicant No. 2 and other co-applicants. Redemption Fine: The Bench fixes redemption fine of Rs. 3,00,000/- in respect of all the goods seized in this case which the applicant is directed to pay within 15 days of the receipt of this order and report compliance to the Revenue and the Commission. Prosecution: Subject of the deposit of duty, fine, interest and penalty as ordered above the Bench grants immunity from prosecution to the applicant/co-applicants under the Act and the Rules framed thereunder as applicable in so far as this case is concerned. Immunity from prosecution is further subject to the condition that it shall further stand withdrawn if the Applicant No. 1 & 2 are charged with similar offence within a period of two years from the date of the order." (e) That, according to the Petitioner, since the aforesaid penalty order contained some inadvertent errors relating to the calculation of the remaining amount, of duty to be paid, and also additionally praying for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by a Central Excise Officer and is in the form of a package under which all aspects of the case are taken into account in a holistic manner while deciding the issues of penalty and interest and the extent of immunity therefrom. In other words, the benefit at the proviso, to Section 11AC has no application in the case of the Petitioner, who has adopted the course of the settlement under Chapter 5 of the Excise Act, since the same does not amount to an adjudication by a Central Excise Officer. 5. Before proceeding to consider the relative merits of the contentions raised on behalf of the parties, it would be necessary to extract the relevant, provisions of the Excise Act: (a) Section 2(b) of the Excise Act reads as under: "Section 2(b): "Central Excise Officer" means the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional. Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench (whether such person be the presiding officer or other Member of the Bench) is unable to discharge his functions owing to absence, illness or any other cause or in the event of the occurrence of any vacancy either in the office of the presiding officer or in the office of one of the other Members of the Bench, the remaining Members may function as the Bench and if the presiding officer of the Bench is not one of the remaining Members, the senior among the remaining Members shall act as the presiding officer of the Bench: Provided that if at any stage of the hearing of any such case or matter, it appears to the presiding officer that the case or matter is of such a nature that, it ought to be heard of by a Bench consisting of three Members, the case or matter may be referred by the presiding officer of such Bench to the Chairman for transfer to such Bench as the Chairman may deem fit: Provided further that at any stage of the hearing of any such case or matter, referred to in the first proviso, the Chairman may, if he thinks that the case or matter is of such a nature that it ought to be heard by a Bench consisting of three Members, constitute such Bench and if Vice-chairman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding anything contained in sub-section (1), where an application was made under sub-Section (1) before the 1st day of June, 2007 but An order under sub-Section (1) of Section 32F has not been made before the said date or payment of amount so ordered by the Settlement Commission under sub-Section (1) of Section 32E has not been made, the applicant shall within a period of thirty days from the 1st day of June, 2007, pay the accepted duty liability failing which his application shall be liable to be rejected. (2) Where any excisable goods, books of accounts, other documents have been seized under the provisions of this Act or rules made thereunder, the assessee shall hot be entitled to make an application under sub-section (1), before the expiry of one hundred and eighty days from the date of the seizure. (3) Every application made under sub-Section (1) shall be accompanied by such fees as may be prescribed. (4) An application made under sub-Section (1) shall not be allowed to be withdrawn by the applicant." (e) Section 32F of the Excise Act, reads as under: "Section 32F: Procedure on receipt of an application under Section 32E. - (1) On receipt of an application under sub Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not furnish the report within the aforesaid period, the Settlement Commission shall proceed to pass an older under sub-section (5) without such report. (5) After examination of the records and the report of the Commissioner of Central Excise received under sub-section (3), and the report if any, of the Commissioner (Investigation) of the Settlement Commission under sub-Section (4), and after an opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard, either in person or through a representative duly authorised in this behalf and alter examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub-Section (3) or sub-section (4). (6) An order under sub-Section (5) shall not be passed in respect of an application filed on or before the 31st day of May, 2007, later than the 39th day of Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the settlement became void." (f) Section 32H of the Excise Act reads as under: "Section 32H: Power of Settlement Commission to reopen completed proceedings. - If the Settlement Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which has been completed under this Act before application for settlement under Section 32E was made, it may, with the concurrence of the applicant, reopen such proceeding and pass such order thereon as it thinks fit, as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceedings also: Providing that no proceeding shall be reopened by the Settlement Commission under this section after the expiry of five years from the date of application. Provided further that no proceeding shall be reopened by the Settlement Commission under this section in a case where an application under Section 32E is made on or after the 1st day of June, 2007." (g) Section 32-I of the Excise Act, reads as under: "Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment in this section had not come into force. (2) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed under sub-section (5) of Section 32F within the time specified in such order or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted. (3) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such, person had, in the course of the settlement proceedings, concealed any particular material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which the appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted." 6. From a plain reading of the provisions reproduced hereinabove the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power of the Settlement Commission to re-open completed proceedings. Section 32-I stipulates that the Settlement Commission shall, in addition to the powers conferred under Chapter V, have all the powers of a Central Excise Officer under the Excise Act or the rules made thereunder. It further stipulates that the Settlement Commission will have the exclusive jurisdiction to exercise the powers and perform the functions of the Central Excise Officer from the time that the application has been allowed to be proceeded with under Section 32F until an order is passed under sub-section (5) thereof. The provisions of Section 32K stipulate that the Settlement Commission is satisfied that an applicant has co-operated with it in the proceedings and has made full and true disclosure of his duty liability, it may grant to such an applicant, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under the Excise Act and also either wholly or in part from the imposition of any penalty or fine under the Excise Act. 7. A similar issue had come up for consideration before this Court in Writ Petition (Civil) No. 1495/2007 and Writ petition (Civil) No. 440 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative the benefit of reduced payment of penalty @ 25%. In this behalf if must, be observed that there is no provision under Section 11AC which provides for waiver of total penalty. Insofar as the reduced payment of penalty @ 25% under the provision of Section 11AC of the Excise Act, is concerned it is noticed that the Petitioner had filed an application for settlement, before the Settlement Commission under the provisions of Chapter V of the Excise Act. The expression "settlement" before the Settlement Commission is in contradistinction to "adjudication" before a Central Excise Officer. The very scheme of the provisions of Chapter V is settlement and not, adjudication. Under the scheme of settlement as contained in Chapter V of the Excise Act, the Settlement Commission makes an order on the application after examination of the records, the report of the Commissioner of the Central Excise and after affording an opportunity to the applicant and the Commissioner of Central Excise to be heard, and after examining evidence as may be placed before it or obtained by it the expression "powers which are vested in a Central Excise Officer under this Act" as stated in Section 32-I of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
