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TMI Blog2014 (8) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Commissioner of Central Excise to be heard, is required to pass an order as it thinks fit under sub-section (5) on the matters covered by the application. It cannot, therefore, be asserted that once the application filed under sub-section (1) of section 32-E has been allowed to be proceeded with under sub-section (3) of section 32-F, the Settlement Commission has necessarily to make a settlement. If that was so, then in that event power would not have been conferred on the Settlement Commission under sub-section (8) of section 32-F to reject the application. Since a complaint had been filed under section 200 of the Code of Criminal Procedure in which charges had been framed on 10 December 2013, the officers, with a mala fide intention made attempts to ensure that the case was not settled. The officers have not been impleaded by name as party respondents and even otherwise the allegations are very vague and have not been substantiated. The Settlement Commission has given good and cogent reasons for sending the case back to the adjudicating authority. The Settlement Commission noticed that the applicants had not accepted a substantial part of the duty liability and had in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed from Unit-I; shortages detected in the stocks of finished goods and raw materials kept in both the Units; records recovered from the residential and office premises of Siddharth Dixit; and the documents recovered from M/s. Anand Sales, Kanpur, the department quantified the total duty evaded by both the Units during the period August 2006 to June 2009 as under:-- Sr. No. Items M/s. Vinay Wires and Poly Products Pvt. Ltd., B-4, UPSIDC Industrial Area, Site-II, Rania, Kanpur Dehat (M/s VWPPPL-I) (Duty in Rs.) M/s. Vinay Wires and Poly Products Pvt. Ltd., C-2, C-5, UPSIDC Industrial Area, Site-II, Rania, Kanpur Dehat (M/s VWPPPL-II) (Duty in Rs.) TOTAL 1. Duty liability quantified on the basis of Parallel Invoices 13,94,292/- 33,54,426/- 47,48,718/- 2. Duty liability quantified on the basis of shortages detected. 10,70,530/- 92,840/- 11,63,370/- 3. Duty liability quantified on the basis of record recovered from Siddharth Dixit 2,29,20,228/- 1,41,95,222/- 3,71,15,450/- 4. Duty liability quantified on the basis of unaccounted holographic film procured from M/s Anand Sales, Kanpur ----------------- 3,51,53,707/- 3,51,53,707/- TOTAL 2,53,85,050/- 5,27,96, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aten up by the officers. A confessional statement was also taken from them under threat. As soon as the petitioner no.2 (the Director) was released on 2 July 2009, he retracted the statements through affidavits which he sent through speed-post to the DGCEI. On 10 November 2009, petitioner no.2 and one Siddharth Dixit were arrested from a hotel in New Delhi and produced before the concerned Magistrate on 12 November 2009. A complaint under section 200 of the Code of Criminal Procedure was filed by the petitioner in the Court of Additional Chief Metropolitan Magistrate, Delhi against the vigilance officers and Deputy Director in the office of DGCEI. The Magistrate took cognizance of the complaint and summons were issued to the accused persons under sections 323, 348, 365, 568 read with section 34 and 120-B of the Indian Penal Code on 1 December 2009. The summoning order was assailed by the accused persons by filing two petitions under section 482 of the Code of Criminal Procedure before the Delhi High Court. The petitions were allowed on 1 March 2011 and the order dated 1 December 2009 passed by the Additional Chief Metropolitan Magistrate was set aside. However, Special Leave Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n forwarded on 18 February 2013 to the Commissioner of Central Excise and Service Tax, Kanpur and the DGCEI for submission of their reports as was required under section 32-F. The DGCEI submitted its report on 16 April 2013. The Revenue reiterated the facts stated in the show cause notice and objected to the allegations made in the applications and submitted that three were issues involved namely :-- "(i) The clandestine clearance made by the factories of the applicant under parallel invoices, admitted by the applicant; (ii) The clandestine sales shown in the data maintained by Shri Siddharth Dixit, admitted by the applicant; and (iii) The demand of ₹ 3,51,53,707/- demanded from Unit-II on laminates related to data recovered from CPU resumed from M/s Anand Sales, not admitted by the applicant." The initial hearing before the Settlement Commission took place on 19 September 2013. At this stage, it needs to be noticed that under section 32-F(6), the Settlement Commission is required to pass an order within nine months from the last date of the month in which the application is made, failing which the settlement proceedings shall abate. However, under the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that since there is no allegation in the impugned order that the applicants had not co-operated with the Settlement Commission, the Settlement Commission was not justified in law in sending the case back to the adjudicating officer even if there was no disclosure of full and true facts. Learned counsel also submitted that even if complex questions involving facts were required to be determined after appreciation of evidence, then too nothing prevented the Settlement Commission from settling the matter instead of sending it back to the adjudicating authority and once the application had been admitted, the Settlement Commission could not have subsequently observed that true and full disclosure had not been made in the application. It is also the submission that the Revenue had made deliberate attempts not to settle the dispute since the Director of the petitioner-Company did not accede to the illegal threats made by the officers of DGCEI not to pursue the criminal case lodged against them. In this connection learned counsel pointed out that as soon as the charges were framed in the criminal case on 10 December 2013, the officers acted in vengeance to ensure that the dispute did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under this sub-section in cases which are pending with the Appellate Tribunal or any court: Provided also that no application under this sub-section shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985(56 of 1986). …………………… Section 32F - Procedure on receipt of an application under section 32E.--(1) On receipt of an application under sub-section (1) of section 32E, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant to explain in writing as to why the application made by him should be allowed to be proceeded with, and after taking into consideration the explanation provided by the applicant, the Settlement Commission, shall, within a period of fourteen days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application as the case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection: Provided that where no notice has been issued or no order has been passed within the aforesaid period by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 (5) 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 29th day of February, 2008 and in respect of an application made on or after the 1st day of June, 2007, after nine months from the last day of the month in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 32E had been made. Provided that the period specified under this sub-section may, for reasons to be recorded in writing, be extended by the Settlement Commission for a further period not exceeding three months. ……………….. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the Commissioner (Investigation), the Settlement Commission may pass such order as it thinks fit. Sub-section (8) of section 32-F postulates that the order passed under sub-section (5) shall provide for the terms of settlement and in case of rejection, contain the reasons therefor. 18. It is in the light of the aforesaid provisions that the contentions advanced by learned counsel for the petitioners require consideration. 19. The first contention is that the Settlement Commission could have sent the case back to the adjudicating authority only if it was of the opinion that any person who made an application for settlement under section 32-E did not co-operate with the Settlement Commission. 20. As noticed hereinabove, under sub-section (5) of section 32-F, the Settlement Commission, after examination of the records and the report of the Commissioner of Central Excise and the report, if any, of the Commissioner (Investigation) and after giving opportunity to the applicant and to the Commissioner of Central Excise to be heard, has to pass such order as it thinks fit on the matters covered by the application. Under sub-section (8) of section 32-F, the order passed by the Sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 32-F that it is only when an application is allowed to be proceeded with that the Settlement Commission shall call for a report along with the records from the Commissioner of Central Excise having jurisdiction. It is after examination of the records and the report of the Commissioner of Central Excise that the Settlement Commission, after giving an opportunity to the applicant and to the Commissioner of Central Excise to be heard, is required to pass an order as it thinks fit under sub-section (5) on the matters covered by the application. It cannot, therefore, be asserted that once the application filed under sub-section (1) of section 32-E has been allowed to be proceeded with under sub-section (3) of section 32-F, the Settlement Commission has necessarily to make a settlement. If that was so, then in that event power would not have been conferred on the Settlement Commission under sub-section (8) of section 32-F to reject the application. 23. The third submission of learned counsel for the petitioners is about the mala fides of the officers of the department. 24. It is sought to be asserted that since a complaint had been filed under section 200 of the Code of Crimina ..... 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