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TMI Blog2001 (9) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... nd recovered certain documents. After investigating the case, the Applicants were served with a SCN alleging evasion of Central Excise duty of Rs. 19.81 lakhs by removing excisable goods in a clandestine manner by suppressing production and by issuing duplicate/false invoices. It was also alleged that they had cleared excisable goods of higher specifications mis-declaring them as of lower specifications and thereby undervaluing the goods and evaded duty to the extent of Rs. 8.5 lakhs. It was also alleged in the SCN that the Applicants had misused the facilities under Rule 57(F)(3) of Central Excise Rules by forging documents and by not following any procedure and thus evading Central Excise duty to the extent of Rs. 6.15 lakhs. The Commissioner of Central Excise, Meerut has adjudicated the case and confirmed the duty demand amounting to Rs. 34,60,831.37. 3. In the present application, the Applicants have admitted the duty liability of Rs. 10,01,380/- only against the first charge of clandestine removal and they have not accepted any duty liability against second and third charges. The Applicants were first heard on 5-10-2000 but as there were certain inconsistencies in the admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also observed that the paper book submitted by the Applicant was not clear at all and this was merely copies of the replies to the SCN submitted before the adjudicating authority. It was stated by the Consultant that 62 lakhs pieces of Separators had been excluded from the calculations made in Table A to the Order-in-Original and, therefore the adjudicating authority had arrived at a lower weight of PVC resins per battery separator at 6.31 grams. The Consultant referred to the information contained at pp. 489-492 of the paper book and emphasized that the stock of PVC resins available to them was not enough to manufacture the alleged quantities. The Bench however impressed upon the Consultant that the Commission cannot go into to the nature of evidence and readjudicate the case, neither this forum was meant for reassessing the evidence. The Bench asked the Consultant to place comparative statement to show the corresponding documents in the paper book in support of their case. If they have admitted duty liability of only Rs. 10 lakhs out of Rs. 19.81 lakhs, as per Annexure-I of the SCN, they had not furnished any evidence why the balance amount of duty liability was not admitted. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 but in spite of that on 5-4-1996 they were intimating the Department that their job work invoice dated 28-2-1996 should be treated as cancelled. And these three invoices were made after Revenue s letter dated 12-2-1996. 6. At the time of hearing on 3rd July, 2001, the Applicants undertook to produce the necessary documents in support of reconciliation that they were claiming viz-a-viz the order in original as also tabular statements supporting evidences on the basis of which the liability against the three charges were not admitted. The Jurisdictional Commissioner was also asked to submit copies of hand-written invoices (PDRs) on the basis of which Annexure II to the SCN was prepared and those, which form part of Chart II attached to the application. The Revenue was also to verify Col. 13 in the paper book supplied by the Applicant and state whether this position was factually correct. Both the Applicants as well as Department was asked to submit their documents within three weeks time from the date of hearing i.e. on 3rd July, 2001. 7. The Applicants made their further submissions on 27th July, 2001. Their submissions again mainly contained rebuttal of the allegations contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding fictitious Gorakhpur party for whom they had done job work and also why the documents for the fictitious Gorakhpur party were printed in Dehradun. In other words, the Applicants had not offered any explanation for allegation 2 and 3 of the Revenue involving duty amounts of Rs. 8.5 lakhs and Rs. 6.15 lakhs respectively. The major submissions of the Applicants has been on the first allegation and duty evasion amounting to Rs. 19.81 lakhs out of which they admitted only Rs. 10.00 lakhs. It is also pertinent to mention that in spite of clear directions of the Bench on 31-10-2000 to the Applicants to pay the balance amount of Rs. 6 lakhs in four equal monthly installments beginning November, 2000, they did not do so. 9. The Revenue was also asked on 3rd July, 2001 by the Bench to submit copies of hand-written invoices (PDRs) and verify Col. 13 in the paper book supplied by the Applicant whether the position was factually correct. The Revenue made their submissions on 18 th July, 2001 enclosing PDRs relating to Chart II and submitting that the Applicant has been unable to satisfy the Commission about duty liability not accepted by them relating to clandestine clearances as deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Record and the Private Despatch Record but not in the RGI during the period 14-9-1995 to 1-5-1996. - Rs. 5,58,327.26/-. 12. The case was first heard for admission on 5-10-2000. During this hearing it was pointed out to the applicant that their statements in the annexures attached to the application were not consistent and there did not appear to be any disclosure on their part. The applicant undertook to amend the application in terms of the statutory requirement. The matter was adjourned to 31-10-2000. On 25-10-2000, the applicant filed revised Annexure-I and Annexure-II stating that the additional amount of duty disclosed and accepted as payable by them was now Rs. 10,01,138/-, instead of Rs. 9,30,124/- as declared by them in their application. During the admission hearing on 31-10-2000, the Bench had again observed that it appeared to them that the applicant is making out a case for the Commission to re-adjudicate upon the SCN. It did not appear that the applicant was coming out with all the facts clearly. In spite of this reservation, the Bench allowed the application to be proceed with under section 32F(1) of the Act vide their Admission Order dated 31-10-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings of the Commission. 14. The applicant has also not made a full and true disclosure of his duty liability in spite of our observations in almost all the hearings held in this case. It may be mentioned that our observations and our exhortations are duly recorded in the Record of Proceedings. Even during the final hearing on 3-7-2001 and in the written submissions presented thereafter, applicant has time and again tried to question the findings of the adjudicating authority rather than coming out with true and complete disclosure of their liability. We also observe that the applicant has not offered any explanation for certain allegations in the SCN which has been up held by the adjudicating authority in its order after giving them full opportunity of hearing. For instance, the applicant does not mention anything with regard to the alleged fraudulent activities by creating a non-existent manufacturer by name M/s. Bhatia Auto Electric Works, Gorakhpur in order to claim that the applicant was doing job work for the aforesaid unit. They have also kept quiet regarding the allegation that the challans in the name of aforesaid unit at Gorakhpur were actually printed at Dehradoon on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained. The Settlement Commission shall, however, not entertain cases pending with the Appellate Tribunal or any Court and nor will it entertain applications involving interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985. Cases where the additional amount of duty accepted to be payable by the applicant approaching the Settlement Commission exceeds two lakh rupees alone will be covered by the proposed Settlement Commission. The Settlement Commission shall, subject to certain provisions, have power to grant immunity from prosecution, penalty, fine and interest in respect to the case covered by the settlement. Every order of settlement shall be conclusive as to the matters covered by the order. 16. The provisions of Chapter V on Settlement of cases in the Central Excise Act, 1944 are para materia the provisions in Chapter XIXA of the Income tax Act 1961 except that the Income tax provisions in section 245C refer to full and true disclosure of income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income tax payable on such income and such other particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against criminal prosecutions by using its power only sparingly and in deserving cases; otherwise such orders may become vulnerable if property challenged. 19. The Apex Court in another case relating to the Income tax Settlement Commission - CIT v. Express Newspapers Ltd. made the following observation at page 456 in 1994 (206) ITR 443 (SC) : .........Chapter XIXA is a part of the Income-tax Act and must be construed consistent with the overall scheme and object. The chapter is meant for those assessees who want to disclose income not disclosed till then together with the manner in which the said income is derived . 20. A Special Bench of the Income-tax Settlement Commission in a case reported in 1997 (228) ITR 0036 ITSC appropriately detailed the Settlement Procedure as under : The Income-tax Settlement Commission was constituted by the Central Government for Settlement of cases in pursuance of Chapter XIXA (Sections 245A to 245M, Section 245M later omitted with effect from June 1, 1987) inserted by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. The scheme of settlement permits assessees to make an application for settlement of his case to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 IP 596 as under : As observed by us earlier, the Settlement Commission was to be constituted for settling complicated claims of chronic tax evaders as an extraordinary measure, for giving an opportunity to such persons to make a true confession and to have matters settled once for all, and earn peace of mind. It is a forum for self-surrender and seeking relief and not a forum for challenging the legality of assessment order or orders passed in any other proceedings. This is not only evident from the provision of the Act which prevents the application made from being withdrawn as also the provision which makes the decision of the Settlement Commission final and conclusive both on questions of law and fact. The power conferred on the Settlement Commission is so wide that it can take any view on any questions of law, which it considers appropriate, having regard to the facts and circumstances of a case, which would be applicable only to that case and it has also the power to give immunity against prosecution or imposition of penalty. 22. The Bombay High Court in the case of CIT v. Income-tax Settlement Commission - 2000 (246) ITR 0063 BOM while dealing with Section 245C and 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been made. (2) For the purpose of sub-section (1), the Central Excise Officer shall be entitled to use all the materials and other information produced by the assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it as if such materials, information, inquiry and evidence had been produced before such Central Excise Officer or held or recorded by him in the course of the proceedings before him. 25. From the above it will be seen that if the applicant has not cooperated with the Settlement Commission in the proceedings before it, the Commission can send back the case to the jurisdictional Commissioner to dispose of the case in accordance with the provisions of the Act. We accordingly order that the case covered by the present Application shall be sent back to the Jurisdictional Central Excise Officer under Section 32L of the Central Excise Act, 1944. The Central Excise Officer shall be entitled to use all the materials and information produced by the applicant before the Settlement Commission or the result of the inquiry held or evidence recorded by the Commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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