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2019 (11) TMI 900 - HC - Central ExciseApplication to Settlement Commission - recovery of short paid duty - Clandestine removal - undervaluation of manufactured goods - it was prayed that the settlement application be rejected, as it did not contain a full and true disclosure of duty liability of Respondents No.1 and 2 - HELD THAT:- Section 32I, which deals with the powers and procedure of the Settlement Commission, provides that, on an application being allowed, by the Settlement Commission, to be proceeded with, under Section 32F, the Settlement Commission would, during the pendency of the application, have, subject to the provisions of Section 32F(4), exclusive jurisdiction to exercise powers and perform functions of any Central Excise Officer, under the Act, in relation to the case. The subjection, of the power so conferred, on the Settlement Commission, to don the mantle of a Central Excise Officer, qua the case before it by Section 32I(1) and (2), to Section 32F(4), is obviously intended to ensure that, buoyed by the said power, the Settlement Commission does not transmute itself into an adjudicating authority, in respect of the case before it. The conferment, on the Settlement Commission, of the “powers of a Customs officer”, or the “powers of the Central Excise Officer” would not, ipso facto, result in the Settlement Commission metamorphosing into an adjudicating authority. The “powers of a Central Excise Officer”, or the “powers of the Customs officer”, conferred on the Settlement Commission, are so conferred to further its aims and objectives, i.e. to further the process of settlement, and assess whether there has, or has not, been full and true disclosure of liability by the applicant before the Settlement Commission. The Settlement Commission does not, by the conferment of such power, become a parallel adjudicating authority, adjudicating the Show Cause Notice - We are aware that the specific statutory stipulation, in Section 32F(1) of the Act, providing for “complexity of the investigation”, as a specific ground for the Settlement Commission to decide or to reject the application filed before it, does not find place in Section 32F, as substituted by Section 122 of the Finance Act, 2007. This, however, does not change the legal position, and amounts, basically, to deletion of a statutory superfluity. A perusal of the case, predicated by the respondents before the Settlement Commission, reflects that they questioned the manner in which available evidence had been appreciated, in the Show Cause Notice, dated 16th January, 2013. The repeated refrain, of the respondents, before the Settlement Commission, was that the evidence in the Show Cause Notice was insufficient to make out a case of clandestine removal or undervaluation, to the extent alleged therein - These very submissions, by themselves, indicate that the Settlement Commission ought not to have proceeded with the case, let alone settle it for less than one-tenth of the demand proposed in the Show Cause Notice. Having not chosen to submit themselves to adjudication, the contention that the Revenue had not been able to produce evidence, to support its case of clandestine removal and under valuation, against Respondents No.1 and 2 , to the extent alleged in the Show Cause Notice, was entirely unavailable to the respondents. The Act does not contemplate any such exercise by the Settlement Commission. Wealth of evidence stands cited, in the Show Cause Notice, against the respondents, though, unquestionably, the bulk thereof relates to the data contained in the computer printouts, recovered from the premises of Respondents No.1 and 2 , and retrieved in the presence of the personnel of the said respondents - The extent to which the effect of such evidence could be ignored, in the light of Section 36B of the Act, is also an aspect which could been examined if the respondents choose to subject themselves to adjudication. The findings recorded in the impugned Final Order, in fact, amount to a truncated adjudication of the Show Cause Notice, without the trappings of the regular adjudicatory process, which would have included admission of the evidence cited in the Show Cause Notice, rebuttal thereof by the respondents, adducing of evidence by the respondents in their favour and rebuttal thereof by the Revenue. Such a summary adjudication, as has been undertaken by the Settlement Commission, is unknown to the Act, or to any other law governing the field. The Settlement Commission fell into serious error of jurisdiction, in settling the case arising from the Show Cause Notice, dated 16th January, for an amount of ₹ 11,80,12,105/-, along with interest, as it has chosen to do - petition allowed.
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