TMI Blog2014 (5) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... nable and no opinion could be recorded by the Settlement Commission. It is true, that under Section 32L the Settlement Commission could send the case back to the Central Excise Officer if in the opinion of the Settlement Commission, the person who made the application for settlement under Section 32E has not co-operated in the proceedings before the Settlement Commission. But no such opinion had been recorded, in the case in hand, therefore, the Settlement Commission could not send the case to the adjudicating authority, i.e. the Central Excise Officer. Since the petitioners’ earlier applications were dismissed on technical defect for non-compliance of the provisions of clause (d) of the proviso to sub-section (1) of Section 32E of the Act and the applications were not considered and decided on merits, therefore, the second applications filed by the petitioners after depositing the additional excise duty and interest would be maintainable and the order passed by the Settlement Commission dated 2-3-2012 and 18-5-2012 cannot be maintained and the writ petition deserves to be allowed and a direction is liable to be issued to the Settlement Commissioner to accept the second applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 32E lays down a procedure before adjudication. In addition to normal procedure prescribed for adjudication of any show cause notice, an alternative scheme for settling cases under Chapter V of the Act had been provided. A Customs and Central Excise Settlement Commission had been constituted by the Central Government in exercise of powers under Section 32 of the Act, for deciding and settling cases specified under the scheme. A bench of Settlement Commission under Section 32A had been constituted at Mumbai under the notification of the Central Government, the bench also has jurisdiction to decide cases of State of Gujarat. 5. All the three petitioners decided to get their cases settled with regard to excise duty, interest and penalty mentioned in the show cause notice dated 8-6-2011, and therefore, they filed three separate applications on 23-1-2012 before the Customs and Central Excise Settlement Commission, Western Region, Mumbai (for short the Settlement Commission ). Since an amount of Rs. 15.00 lakhs was deposited by Vadilal Chemicals Limited during inquiry by the DGCEI and the Excise Department had mentioned in the show cause notice that Vadilal Gases Limited and Vadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rejection of the petitioners applications on 2-3-2012 by the Settlement Commission, the VGL on 15-3-2012 deposited the additional amount of excise duty, and on 31-3-2012 deposited the interest due under Section 11AB of the Act and thereafter all the three petitioners filed fresh separate applications before the Settlement Commission on 17-4-2012 under Section 32E(1) of the Act, requesting the Settlement Commission to settle their cases in pursuance of show cause notices dated 8-6-2011 issued by the DGCEI. These fresh applications filed by the petitioners have been returned by the Settlement Commission by order dated 18-5-2012 on the ground that since earlier the Settlement Commission had passed a final order on 2-3-2012 rejecting the applications filed by the petitioners, and ordered abatement of proceedings before it. Since the petitioners had not deposited the accepted excise duty and interest, therefore, in the absence of any provision under Chapter V of the Act and the Rules and procedures made there-under for entertaining another application for the same case, which is already rejected and abated to the adjudicating authority under Section 32F(1) of the Act, the Settleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly rejected the applications filed by the petitioners by order dated 2-3-2012 as the admitted amount of additional duty and interest was not deposited by VGL. In the show cause notice no excise duty or interest was demanded from the Petitioners Nos. 2 and 3. So far as Petitioners Nos. 2 and 3 are concerned. Mr. Gaurang Bhatt has urged that Petitioners Nos. 2 and 3 were not required to deposit any amount as there was no demand against them for payment of additional excise duty or interest, but according to him, Petitioners Nos. 2 and 3 have preferred applications before the Settlement Commission for adjustment of the amount of Vadilal Chemicals Limited against the excise duty and interest dues of VGL, therefore, the Settlement Commission rightly rejected their applications by order dated 2-3-2012 and the second applications filed on 17-4-2012 by the petitioners on the same cause would not be maintainable. 12. The question that arises before us is whether the Settlement Commission on the first applications dated 23-1-2012 filed by the petitioners, could have passed final order rejecting it and abating the proceedings before it by order dated 2-3-2012. For better understanding of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be defective and not maintainable. The Settlement Commission in its discretion may allow time to the applicants to remove the defects or may direct that the applications be returned. Such discretionary power must be deemed to have been conferred on the Settlement Commission. In our opinion, the Settlement Commission should be considered to be possessed with such ancillary or incidental power that are necessary to discharge its function effectively for the purpose of doing justice between the parties. But the applications which are not maintainable or entertainable because of the embargo created by the first proviso to sub-section (1) of Section 32E cannot, in any case, be considered and decided or rejected by the Settlement Commission under Section 32F(1) of the Act. The scope of Section 32F is limited to valid applications which do not suffer from any bar created by the first proviso to sub-section (1) of Section 32E. 14. In the order dated 2-3-2012 the Settlement Commission had mentioned that the order is being passed under Section 32F(1), however, while returning the second application filed by the petitioners, the Settlement Commission in its order dated 18-5-2012 had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its functions. We consider it necessary to extract Section 32-I(2) of the Act as under :- 32-I. Powers and procedure of Settlement Commissions :- (2) Where an application made under Section 32E has been allowed to be proceeded with under Section 32F, the Settlement Commission shall, until an order is passed under sub-section (5) of Section 32F, have, subject to the provisions of sub-section (4) of that section, exclusive jurisdiction to exercise the powers and perform the functions of any Central Excise Officer, under this Act in relation to the case. From the perusal of sub-section (2) of Section 32-I, it is clear that Section 32F would only be applicable if an application, filed under Section 32E(1), is a valid application and had been permitted to be proceeded with under Section 32F till an order under sub-section (5) subject to the provisions of sub-section (4) is passed under Section 32F of the Act. Sub-section (4) of Section 32F provides that a report has to be called from the Commissioner of Central Excise within a specified period and after examining the report, fresh inquiry report can be called for. Sub-section (5) provides that after examining the report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications of the petitioners as under : Dated 2-3-2012 - ... The applications therefore do not fulfil/satisfy the criteria laid down under Section 32E(1) of the CEA, 1944 inasmuch as they have not paid the accepted duty and interest liability. The following order is passed in terms of sub-section (1) of Section 32(F) of the Central Excise Act, 1944. ORDER The applications filed by the applicant and the co-applicants are rejected and the proceedings before Settlement Commission stand abated. All concerned are informed accordingly. We also deem it appropriate to extract the operative part of the order 18-5-2012 passed by the Commissioner (Inv.) Settlement Commission, Additional Bench, Mumbai on the second applications of the petitioners as under : Dated 18-5-2012 - ... As there is no provision under Chapter V of the Central Excise Act, 1944 and rules/procedures made thereunder for entertaining another application for the same case, which is already rejected and has abated to the adjudicating authority under Section 32F(1) of the Central Excise Act, 1944. The Hon ble Commission has therefore directed that your applications dated 17-4-2012 should be returned. The same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d applications filed by the petitioners. The Apex Court in Sheodan Singh v. Daryao Kunwar, AIR 1966 SC 1332 had held in paragraph 13 as under :- Where, for example, the former suit was dismissed by the trial Court for want of jurisdiction, or for default of plaintiff s appearance, or on the ground of non-joinder of parties or misjoinder of parties or multifariousness, or on the ground that the suit was badly framed, or on the ground of a technical mistake, or for failure on the part of the plaintiff to produce probate or letter of administration or succession certificate when the same is required by law to entitle the plaintiff to a decree, or for failure to furnish security for costs, or on the ground of improper valuation or for failure to pay additional court fee on a plaint which was undervalued or for want of cause of action or on the ground that it is premature and the dismissal is confirmed in appeal (if any) the decision not being on the merits would not be res judicata in a subsequent suit. In another decision, the Apex Court in State of Maharashtra and Another v. M/s. National Construction Company, Bombay and Another, AIR 1996 SC 2367 in paragraph 6 had held as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 32F, in relation to a case, such person is convicted of any offence under this Act in relation to that case; or (iii) the case of such person is sent back to the Central Excise Officer having jurisdiction by the Settlement Commission under Section 32L, then, he shall not be entitled to apply for settlement under Section 32E in relation to any other matter. 19. We have carefully examined Section 32-O of the Act. We do not find that under any of the clauses of Section 32-O the second applications of the petitioners will be barred. In the order dated 2-3-2012 no direction had been issued under Section 32L nor any such direction could be issued under Section 32L of the Act as the applications of the petitioners had to be rejected as not entertainable and no opinion could be recorded by the Settlement Commission. It is true, that under Section 32L the Settlement Commission could send the case back to the Central Excise Officer if in the opinion of the Settlement Commission, the person who made the application for settlement under Section 32E has not co-operated in the proceedings before the Settlement Commission. But no such opinion had been recorded, in the case in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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