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2013 (1) TMI 305

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..... 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 (1) or sub section (6). The matter relating to the lack of jurisdiction of the Settlement Commission was specifically raised by the Commissioner of Central Excise in his report dated 13-09-2004 submitted to the Settlement Commission under clause (1) of Section 32F and the said issue has been decided by the Settlement Commission in its order of admission dated 31-05- 2005. Therefore its finding that the order of the Commissioner of Central Excise dated 30-07-2004 is non est in law is a finding given by it in exercise of jurisdiction conferred on it under Section 32F (7). Therefore, it cannot be said that the said finding given by the Settlement Commission is without jurisdiction. Therefore the said order of the Settlement Commission cannot be denuded of its efficacy by any collateral attack or in incidental proceedings. As this portion of the order of the Settlement Commission dated 31-05-2005 was admittedly not challenged by the Revenue in W.P. of 2005 or in S.L.P. of 2006, the Revenue is barred by t .....

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..... the invoices issued by the appellants towards the sale of veneers/plywood/block boards. 3. A show cause notice dated 01-11-2003 was served on them contending (a) that the clearance of all excisable goods i.e. veneer made by the appellants during the financial years 1998-99 to 2002-03 (up to November 2002) were under valued resulting in short payment of duty, (b) that the amounts in excess of the invoice values were realized either through cash or through D.Ds., which was in- turn utilized for unaccounted expenditure and (c) the appellants in order to camouflage the excess amounts received through D.Ds. indulged in the fictitious sale of non-excisable goods like sawn timber door/window frames, trading etc. It proposed to demand from the Truwood Group consisting of the appellants and three other companies, a sum of Rs.21,48,55,018/- besides a penalty under Section 11-AC of the Central Excise Act, 1944 along with interest under Section 11 AB thereof. 4. A detailed reply dated 11-05-2004 was submitted rebutting the allegations made in the show cause notice by the appellants. On 11-05-2004, a personal hearing was provided to the appellants wherein the appellants also requested for .....

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..... was "non est" in the eye of law. 10. Challenging the same, the Revenue filed W.P.(C) No. 21055/2005 before the Delhi High Court only questioning the admission of the application filed by the appellants before the Settlement Commission but not challenging that portion of the order of the Settlement Commission wherein it had declared the Order dated 30-07-2004 in Order in Original No.14/2004 of the Commissioner of Central Excise as non est in law. By order dated 10-11-2005, the Delhi High Court held that the Settlement Commission was correct in law in admitting the application of the appellants for settlement under clause (1) of Section 32-F of the Act and its order did not suffer from want of jurisdiction. 11. This order was challenged in S.L.P.No.4715/2006 by the Revenue before the Supreme Court of India. On 10-07-2006, the S.L.P. was dismissed. 12. The appellants and the Revenue participated in the final proceedings before the Settlement Commission. Several hearings were held and a final order No.F- 471-472/CE/07 SC(PB) dated 17-01-2007 was passed by the Settlement Commission rejecting the application for settlement filed by the appellants and remitting the case back to the .....

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..... on for settlement; that the appellate jurisdiction of the Tribunal cannot be taken away by the observation of the Settlement Commission that the adjudication order dated 30- 07-2004 was non est; and that the Settlement Commission did not have the power to decide upon the validity of the adjudication order. It further held that since the Committee of the Chief Commissioners is a statutory creation for a specific purpose of deciding whether the appeals have to be filed or not, the appeals filed by the Revenue against the impugned order were maintainable. 17. Challenging the said order, the present appeals have been filed by the assessees raising the following substantial questions of law; "(a) Whether the decision of the Tribunal is correct in holding that the adjudication order passed by the Commissioner of Central Excise, Visakhapatnam which was passed after filing of an application before the Settlement Commission under Section 32E of the Central Excise Act and was declared as "Non Est" by the Settlement Commission is valid in law. (b) Whether the decision of the Tribunal in holding that the Committee of Chief Commissioners can review an adjudication order passed by .....

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..... ction to exercise the powers and perform the functions of any Central Excise Officer in relation to the "case" and it has all the powers which are vested in any Central Excise Officer under the Act. The admission by the Settlement Commission of the application for settlement vide its order dated 31-05-2005 took place after it took into account the letter dated 13-09-2004 of the Commissioner (informing the Settlement Commission about the passing of the adjudication order after the application for settlement was filed by the appellants). So the order of the Commissioner was non est in law having been passed after the application was filed for settlement. Therefore the view of the Tribunal (that the order of adjudication officer/Commissioner dated 30-07-2004 is correct), is perverse and unsustainable. It is also contended that the fact that the Delhi High Court and the Supreme Court have confirmed the order dated 31-05-2005 of the Settlement Commission admitting the application for settlement demonstrates that the Settlement Commission was correct in holding that the order of the Commissioner dated 30-07-2004 is non est in law. 20. Sri Rajasekhar Reddy, learned Senior Standing Couns .....

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..... e goods in respect of which he admits short levy on account of misclassification or otherwise of such excisable goods, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided: Provided that no such application shall be made unless,- (a) The applicant has filed returns showing production, clearance and Central Excise duty paid in the prescribed manner; (b) show cause notice for recovery of duty issued by the Central Excise Officer has been received by the applicant; and (c) the additional amount of duty accepted by the applicant in his application exceeds two lakh rupees; Provided further that no application shall be entertained by the Settlement Commission 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 (5 of 1986)" Section 32F states as follows: "Section 32F: Procedure on receipt of an application under section .....

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..... the time specified or extended period, as the case may be, the Settlement Commission may direct that the amount which remains unpaid, together with simple interest at the rate of eighteen per cent per annum or at the rate notified by the Central Board of Excise and Customs from time to time on the amount remaining unpaid, be recovered, as the sum due to Central Government by the Central Excise Officer having jurisdiction over the assessee in accordance with the provisions of section 11. (6) Where an application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner of Central Excise having jurisdiction and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner (Investigation) to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case. (7) After examination of the records and the report of the Commissioner of Central Excise received under sub-sec .....

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..... -2004 and therefore the Settlement Commission has no jurisdiction to entertain application for settlement filed by the appellants. After considering the same, the Settlement Commission had admitted the application of the appellants for settlement vide admission order No.A-341- 342/CE/05-SC (PB) dated 31-05-2005. This order also held that the Order in Original No.14 of 2004 of the Commissioner of Central Excise dated 30-07-2004 is non est in eye of law. The admission of the application by the Settlement Commission alone was challenged before the Delhi High Court and the Supreme Court by the Revenue and the said challenge was negatived by order dated 10-11- 2005 in W.P.No.21055/2005 and SLP No.4715/2006 dated 10-07-2006. 25. In view of the language of clause (7) of Section 32F of the Act, the Settlement Commission was entitled to pass final orders not only in relation to matters covered by the application for settlement but also 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 (1) or sub section (6). The matter relating to the lack of jurisdi .....

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