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TMI Blog2014 (8) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... which was disputed by the petitioner. - matter remanded back to commission - Decided in favour of assessee. - Special Civil Application No. 14677 of 2013 - - - Dated:- 16-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Petitioner : Mr. S. N. Thakkar For the Respondent : Ms. Manisha Lavkumar JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following main reliefs :- (a) That this Hon ble Court maybe pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India, calling for the records of the petitioner s case and after going into the validity and legality thereof to quash and set aside the Final Order No.F.No.113/CEX/JRG/2012/SC(MB) dated 30/4/2013 passed by the respondent No.3 in Settlement Application No.SA(E)261/2012 and further direct the respondent No.4 not to proceed with the adjudication of the said SCN bearing No.F.No.DGCI/AZU/36-120/2009 dated 23/12/2009; (b) That this Hon ble Court be pleased to issue a writ of mandamus or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D as per parallel invoices issued for obtaining finance. The said application was submitted on 18/6/2012. 2.3. It appears that along with the said application for settlement, the petitioner paid additional amount of excise duty accepted by him along with interest due under section 11AB i.e. on ₹ 1,02,95,768/-. It appears that thereafter having satisfied that the petitioner has complied with all requirements as required under section 32E of the Act, the Settlement Commission passed order on 8/3/2013 under section 32F of the Act allowing the said application to be proceeded with and granted opportunity to the petitioner as well as Jurisdictional Commissioner of Customs having jurisdiction over the case as provided and/or required to be granted under section 32F(5) of the Act. It appears that the petitioner insisted that either dispute with respect to demand of duty claimed under section 11D as per parallel invoices issued for obtaining finance i.e. with respect to demand of ₹ 35,13,847/- be adjudicated upon and decided by the Settlement Commission or the same may be sent to the concerned adjudicating authority to adjudicate the Show Cause Notice with respect to the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appearing on behalf of the petitioner has, at the outset stated at the bar that the petitioner is not insisting to accept their request as suggested by his advocate before the Settlement Commission that the application may be settled only in respect of the two issues where duty demand has been accepted by the petitioner and the third issue relating to section 11D may be referred to the adjudicating authority for deciding as per law. However, has submitted that the once application submitted by the petitioner before the Settlement Commission on compliance of all requirement under section 32E and thereafter i.e. on payment of additional amount of excise duty accepted by the petitioner along with interest due under section 11AB and thereafter application before the Settlement Commission was permitted to be allowed to be proceeded by passing an order under section 32F(1) of the Act. That thereafter the Settlement Commission was required to pass a final order under section 32F(5) of the Act. It is submitted that as such the Commissioner was required to pass a final under section 32F(5) of the Act after following due procedure as required under section 32F of the Act more particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay additional duty of excise duty accepted by him along with interest due and under section 11AB. It is submitted that therefore, as such it was not incumbent upon the petitioner to accept the entire demand raised in the Show Cause Notice. It is submitted that the petitioner may accept the duty liability claimed by Show Cause notice partially and approach the Settlement Commission accepting the liability to the extent the petitioner accept the liability and with respect to the rest of the dispute, after calling the report from the Commissioner, the Settlement Commission is required to pass an appropriate order under section 32F(5) of the Act after giving opportunity to the petitioner as mentioned in Section 32F(5) of the Act. It is submitted that therefore, the observations made by the Settlement Commission that as the petitioner has not accepted the demand duty amounting to ₹ 35,13,847/- under section 11D of the Central Excise Act and rest of the legal issue with respect to applicability of section 11D of the Act and rejection of application on the aforesaid and treating the same as noncooperation and thereby passing order under section 32L of the Act cannot be sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per parallel invoices issued for obtaining finance and (4) demand of interest on differential duty against the invoices raised. However, the petitioner submitted application before the Settlement Commission under section 32E of the Act accepting duty liability to the extent of ₹ 1,02,95,768/- and interest on the said admitted duty. The petitioner did deposit the entire additional duty on the aforesaid accepted duty amount i.e. ₹ 1,02,95,768/- and the interest thereon. It appears that thereafter having satisfied that all requirements under section 32E of the Act has been complied with and/or satisfied, the Commissioner passed an order under section 32F of the Act allowing the petitioner to proceed with the Settlement Application. However, it also transpires that thereafter the Settlement Commissioner gave an opportunity to the petitioner as well as Jurisdictional Commissioner as required under section 32F(5) of the Act and the concerned Commissioner did send the report. However, thereafter without passing any final order under section 32F(5) of the Act, the learned Commission passed order under section 32L of the Act by observing in paragraph Nos.6.6 and 6.7 as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided 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 the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with. (2) A copy of every order under sub-section (1), shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. (3) Where an application is allowed or deemed to have been allowed to be proceeded with under subsection (1), the Settlement Commission shall, within seven days from the date of order under sub-section (1) call for a report along with the relevant records from the Commissioner of Central Excise having jurisdiction and the Commissioner shall furnish the report within a period of thirty days of the receipt of the communication from the Settlement Commission: Provided that where the Commissioner does not furnish the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 has been made: Provided that the period specified under this subsection may, for reasons to be recorded in writing, to be extended by the Settlement Commission for a further period not exceeding three months. (7) Subject to the provision of section 32A, the materials brought on record before the Settlement Commission shall be considered by the members of the concerned bench before passing any order under subsection (5) and, in relation to the passing of such order, the provisions of section 32B shall apply. (8) The order passed under sub-section (5) shall provide for the terms of settlement including any demand by way of duty, penalty or interest, the matter in which any sums due under the settlement shall be paid and all other matters to make the settlement effective and in case of rejection contained the reasons therefor and it shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentations of facts: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner and for which dispute has been raised, after following due procedure as required under section 32F(3) to 32F(5) of the Act. In the present case, the learned Settlement Commission has materially erred in not exercising the jurisdiction and passing order under section 32F(5) of the Act with respect to demand of duty amounting to ₹ 35,13,847/- under section 11D of the Act, which was disputed by the petitioner. According to Ms.Manisha Lavkumar, learned advocate appearing on behalf of the Department, as such, as per the report submitted by the Commissioner, duty liability under section 11D of the Act raised by the department has been established. If that be so, in that case also, after giving an opportunity of being heard to the petitioner to meet with the report submitted by the Commissioner, Settlement Commission was required to pass appropriate order as per section 32F(5) of the Act, which the learned Commissioner has failed to do. Under the circumstances, the impugned order deserves to be quashed and set aside and the matter is to be remanded to the learned Settlement Commission to pass appropriate order in accordance with law and on merits and after following due pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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