9911796707
TMI Blog2017 (10) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 approached this Court, with following prayers : "(a) This Hon'ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing and setting aside the order of the Commission at Annexure 'L' and be further pleased to hold that the petitioners are entitled to settle the present matter on a sum of Rs. 66 lakhs as originally accepted by them in their statement before the Settlement Commission. (b) Pending hearing and final disposal of the petition, this Hon'ble Court be pleased to stay operation and implementation of the impugned order of the Commission and direct that no coercive action be taken against the petitioners in the meantime. (c) An ex parte ad interim relief in terms of para (b) be also granted. (d) Any other and further relief that may be thought fit may also be granted." 4. Facts in brief, as could be culled out from the memo of the petition deserves to be set out as under : 4.1 The petitioners are in the business of manufacturing and packing of Om Brand unmanufactured tobacco falling under the Central Excise Heading 2411 09 00. The activity is carried out with the aid of pouch packing ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner and Hasmukhbhai did not succumb to department, they were arrested on 21-10-2014. Even prior to their arrest, on 21-10-2014, their statements were recorded and they have stick to their statement that machine was purchased in August, 2014. 4.5 A show cause notice dated 19-2-2015 was issued by the Department. It is submitted that the petitioners were required to technically pay the duty when both the machines worked together i.e. in August & September, 2014, however, there was clearly nothing to demonstrate that the machine was installed in October, 2013 except bald statement. In such circumstances, the petitioners thought it fit and fair to go to the Settlement Commission as they were directed to pay the duty which was technically due from them for the said two months. Accordingly, they filed an application before the Settlement Commission agreeing to pay the duty of Rs. 66 lakhs for the period August/September, 2014. It is stated that at the time of admission of said application, it was brought to the notice of Settlement Commission that petitioners have already deposited a sum of Rs. 1.39 crore approximately in the course of investigation and taking bail and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but only a bald statement was recorded after one year. In the context of diary recovered, it is submitted that it neither shows the date nor sale of any machine and the details in said diary pertained to repairing of the machine and not supply of machine. Furthermore, it is stated in said diary that the machine is of Sureshbhai but no statement of Sureshbhai is recorded and thus, the statement of alleged supplier does not support the case of department. 9. Learned Counsel appearing for the petitioners submitted that detailed evidences were produced before the Commission to demonstrate that the machine was only purchased and used in August and September, 2014 and in support of submission, the petitioners have also produced on record the electricity bill, R.G.1 register, which is statutory register but the Commission has not considered the same and dealt with same in impugned decision. It is submitted that there is no proof of excess production of raw material, excess electricity consumption, excessive sale, illicit clearance etc., from October, 2013 and in absence thereof, the theory that machine was installed in August, 2013 can under no circumstances be sustained. It is sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore did not take the department's case any further. As a matter of fact, the Settlement Commission even finds in Para 24 of the order that statements are vacillating. 13. Learned Counsel for the petitioners submitted that as per provisions of Section 32F(3) (4) and (5), more specifically Section 32F(7) clearly impose a duty on the Commission to consider the evidence and materials placed before it. Even otherwise, the Commission is duty bound to fairly inquire into various aspects of merits and settle the actual amount of demand of duty as per Section 32F(8). 14. Learned Counsel appearing for petitioners submitted that it is well- settled law laid down by the Supreme Court that when the authority considers material and evidence which is not relevant or effective to consider the material and evidences which are clearly relevant then, there is primary and fundamental flaw which would render the judgment either perverse or at least having an error apparent on the face of the record and prayed that the matter be remanded to the Settlement Commission for at least considering the aforesaid aspects in order to arrive at supporting findings in law as to when the machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visit on 3-9-2014, it was found that there were three machines were installed and physically found in their factory premises, out of which, one machine was found as non-working and in sealed condition and two machines were in working condition. Out of which, one machine was declared with the department and another machines was not declared with the department under prescribed declaration. Hence the petitioner had not mentioned in their returns regarding this extra machine and they had not made any payment of central excise duty for this machine. 18. Learned Counsel appearing for respondent no. 2 submitted that the claim of petitioner that machine was installed in August, 2014 is wrong. The petitioner has no evidence to substantiate their claim that they had installed the third machine on August, 2015. The department has visited the factory premises of M/s. Vaibhav Packaging owned by Shri Rajubhai Panchal and recorded his statement. He has stated that third machine was assembled by him in his factory and after completion, he dispatched the said machine to the factory premises of petitioner in the last week of October, 2013. It is submitted that said third machine was purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tempo driver after almost 2 years of recording his statement and that too, the retraction has been given to the Settlement Commission on first instance. Such belated retraction is to be treated as an afterthought and cannot be given any weight particularly in the face of incontrovertible evidence in the form of statements of Shri Rajubhai Panchal @ Haresh Pravinbhai Kanadia, as well as of the Proprietor & Authorized signatory of the petitioner recorded under Section 14 of the Central Excise Act, 1944. He has also submitted that statements recorded before Central Excise Officer under Section 14 of the Act, have enormous evidentiary value and are admissible in evidence. 22. Learned Counsel appearing for respondent no. 2 submitted that Section 3A of the Act empowers the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods and accordingly, in exercise of powers conferred by Sub-section (2) & (3) of Section 3A of the Act, the Central Government made Chewing Tobacco & Unmanufactured Tobacco Machines (capacity Determination & Collection of Duty) Rules, 2010 vide notification dated 27-2-2010 as amended. The goods manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, who shall approve such fresh declaration and re-determine the annual capacity of production following the procedure specified in sub-rule (2). 26. Learned Counsel appearing for respondent no. 2 also relied on Rule 7, 8 and 10 of 2010 Rules. He also relied on Rule 13 of 2010 Rules and submitted that it provides that if a manufacturer wants to add or install a packing machine in his premises, he shall give a notice to this effect at least three working days in advance from the date of such addition or the installation of the packing machine to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, under the physical supervision of Superintendent of Central Excise. 27. Learned Counsel appearing for respondent no. 2 submitted that in view of provisions of 2010 Rules, it is abundantly clear that duty liability is dependent on the number of PPMs installed and working in the factory. Of course, the duty varies depending on the maximum speed of PPM, MRP of the notified goods and other parameters. It is again emphasized that exact de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, provides for assessee made an application before the adjudication to the Settlement Commission, to have the case settled containing full and true disclosure of his duty liability and seek settling of the dispute. Section 32(e) as it stood, reads as under : Section 32E. Application for settlement of cases. - (1) An assessee may, in respect of a case relating to him, make an application, before adjudication, to the Settlement Commission to have the case settled, in such form and in such manner as may be prescribed and containing a full and true disclosure of his duty liability which has not been disclosed before the Central Excise Officer having jurisdiction, the manner in which such liability has been derived the additional amount of excise duty accepted to be payable by him and such other particulars as may be prescribed including the particulars of such excisable goods in respect of which he admits short levy on account of misclassification, under-valuation, inapplicability of exemption notification or Cenvat credit or otherwise and any such application shall be disposed of in the manner hereinafter provided : Provided that no such application shall be made unless, - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 sub-section (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 Principal Commissioner of Central Excise or Commissioner of Central Excise having jurisdiction and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission : Provided that where the Commissioner does not furnish the report within the aforesaid period of thirty days, the Settlement Commission shall proceed further in the matter without the report of the Commissioner. (4) Where a report of the Principal Commissioner or Commissioner called for under sub-section (3) has been furnished within the period specified in that sub-section, the Settlement Commission may, after examination of such report, if it is of the opinion that any further enquiry or investigation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record before the Settlement Commission shall be considered by the Members of the concerned Bench before passing any order under sub-section (5) and, in relation to the passing of such order, the provisions of section 32D 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 manner 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 contain the reasons therefore 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 misrepresentation of facts : Provided that the amount of settlement ordered by the Settlement Commission shall not be less than the duty liability admitted by the applicant under section 32E. (9) Where any duty, interest, fine and penalty payable in pursuance of an order under sub-section (5) is not paid by the assessee within thirty days of receipt of a copy of the order by him, the amount which remains unpaid, shall be recovered along with interest due there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. (4) The Settlement Commission shall, subject to the provisions of this Chapter, have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers, or of the discharge of its functions, including the places at which the Benches shall hold their sittings. Section 32L. Power of Settlement Commission to send a case back to the Central Excise Officer. - (1) The Settlement Commission may, if it is of opinion that any person who made an application for settlement under section 32E has not cooperated with the Settlement Commission in the proceedings before it, send the case back to the Central Excise Officer having jurisdiction who shall thereupon dispose of the case in accordance with the provisions of this Act as if no application under section 32E had 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for seeking appropriate relief. 33. The counsel for the petitioner invited Court's attention to the case put up by the petitioner before the Settlement Commission and submitted that the factum of additional machine being non-operative for which imputation is made and duty liability is raised, have been unfortunately have been adverted at all. The statements recorded by Department during investigation, which have been relied upon by the officer for issuing show cause notice, could be treated as statement made by third party and therefore, no liability can be attached based thereupon. 34. The counsel for the petitioner submitted that the factum of machine and its delivery at the place and premises, happened only in last week of October, 2013 and there is a corroboration from Hasmukh Ugarchand Patel (authorized signatory of M/s. Hasmukh Tobacco Products) - date 12-9-2014, as could be seen from the contentions raised under captioned ground "E", Page-91. Learned counsel for the petitioner also invited court's attention to the averments made at chronology of the statements recorded by the department during the investigation and relied upon in show cause notice under caption ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
