TMI Blog2010 (1) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... rit and is, resultantly, dismissed - 9104/2009 - - - Dated:- 29-1-2010 - A.K. Sikri and Siddharth Mridul, JJ. S/Shri Rupesh Kumar and Harpreet Singh, Advocates, for the Petitioner. S/Shri A.S. Chandiok, ASG with Mukesh Anand, Shailesh Tiwari, Sumit Batra, Ritesh Kumar, R.C.S. Bandana and Vaibhav Jain, Advocates, for the Respondent. [Judgment per: Siddharth Mridul, J.]. - By way of the present writ petition the Petitioner seeks to challenge the Miscellaneous Order No. 142/CE/09-S.C. (PB) dated 29th April, 2009 [2009 (247) E.L.T. 853 (Sett. Comm.)] and prays for the following relief: "(i) Quash and set aside the impugned miscellaneous order - dated 29-4-2009 and received by the petitioner on 8-5-2009 to the extent, it denies the benefit of payment of penalty @ 25% as provided under Section 11AC of the Excise Act; (ii) Consequent to (i) above, direct, the Settlement Commission to grant to the petitioner, complete immunity from penalty or in the alternative, extend the benefit of reduced payment of penalty @ 25% under Section 11AC." 2. The facts as are necessary for the adjudication of the present, writ, petition may be adumbrated as follows:- (a) the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on the following terms and conditions:- "Central Excise Duty: Central Excise Duty is settled at Rs. 4,74,09,053/-. As an amount of Rs. 4,30,00,000/ is already deposited, the same shall be appropriated. For the balance amount of Rs. 16,29,436.00, the main applicants are directed to pay the said amount. Within 15 days of the receipt of this order and report compliance to the Revenue and the Commission. Interest: Main applicants have resorted to clandestine removal over a very long period. They did not pay the duty on the dates it was due and therefore, taken financial accommodation at the cost of exchequer. The Bench is therefore, not inclined to grant immunity to them from interest. The Bench orders payment of interest as applicable under the relevant provisions during the period from the dates when the duty was due till the dates it was paid. The Revenue shall accordingly calculate and intimate to the applicants the amount of interest, as order within 15 days of receipt of this order who thereupon shall pay the same within the next 15 days under intimation both to the Commissioner and the Revenue. Penalty: The Bench imposes penalty of Rs. 3,00,00,000/- under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Petitioner on 8th May, 2009. Aggrieved by the said impugned order dated 29th April, 2009, the Petitioner, as aforesaid, has filed the present writ petition. 3. On behalf of the Petitioner, it has been strenuously urged that the benefit of proviso to Section 11AC was admissible in the ease of the Petitioner and, therefore, the amount of penalty was liable to be reduced to 25% of the total amount of penalty, payable. In other words, it was urged that the Settlement Commission performed the function of a Central Excise Officer while exercising its jurisdiction and that in the exercise of such powers the Settlement Commission ought to have applied the provisions of Section 11AC in their entirety to the adjudication of the penalty imposed on the Petitioner including the benefit of payment of penalty @ 25% only when the duty had been deposited within 30 days from the communication of the order. 4. Per contra, it was argued on behalf of the Respondents that the scheme of settlement as contained in Chapter V of the Excise Act is distinct from, an adjudication under taken by a Central Excise Officer and is in the form of a package under which all aspects of the case are taken into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other provisions of this Chapter, the jurisdiction, powers and authority of the Settlement Commission may he exercised by Benches thereof. (2) Subject to the other provisions of this section, a Bench shall be presided over by the Chairman or a Vice Chairman and shall consist of two other Members. (3) The Beech for which the Chairmen is the presiding officer shall be the principal Bench and ether Benches shall be known as additional Benches. (4) Notwithstanding anything contained in sub-Section (1) and sub-Section (2), the Chairman may authorise the Vice Chairman or other Member appointed to one Bench to discharge also the functions of the Vice Chairman or, as the case may be, other Member of another Bench. (5) The principal Bench shall sit at Delhi and the Central Government shall, by notification in the Official Gazette, establish .additional Benches at such places as it considers necessary. (6) Notwithstanding anything contained in the foregoing previsions of this section, and subject to any rules that may be made in this behalf when one of the persons constituting a Bench (whether such person be the presiding officer or other Member of the Bench) is unable to disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which no proper record has been maintained by the assessee in his daily stock register and any such application shall be disposed of in the manner hereinafter provided ; Provided that no such application shall be made unless, (a) The appllicant has filed returns showing production, clearance and Central excise duty paid in the prescribed manner: (b) a show cause notice for recovery of duty issued by the Central Excise Officer, has been received by the applicant; (c) the additional amount of duly accepted by the applicant, in his application exceeds three lakh rupees; and (d) the applicant, has paid the additional amount of excise duty accepted by him along with interest due under Section 11AB: 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 excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986). (1A) Notwithstanding anything contained in sub-section (1), where an application was made under sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction and the Commissioner shall furnish the report within a period of thirty days of the receipt of Communication from 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 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 matter is necessary, direct, for reasons to be recorded in writing, the Commissioner (Investigation) within fifteen days of the receipt of the report, to make or cause to be made such further enquiry or investigation and furnish a report within a period of ninety days of the receipt of the communication from the settlement Commission, on the matters covered by the application and any other matter relating to the case: Provided that where the Commissioner (Investigation) does not furnish the report within the aforesaid period, the Settlement Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: Provided that, the amount of Settlement order 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 thereon, as the sums due to the Central Government, by the Central Excise Officer having jurisdiction over the assessee in accordance with I he provisions of Section 11. (10) Where a settlement becomes void as provided under sub-Section (8), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Central Excise Officer having jurisdiction may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the elate of the receipt, of communication that the settlement became void." (f) Section 32H of the Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settings." (h) Section 32K of the Excise Act reads as under: "Section 32K: Power of Settlement Commission to grant immunity from prosecution and penalty . - (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under Section 32E has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this act, and also either wholly or in part from the imposition of any penalty and fine under this Act, with respect to the case covered by the settlement. Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under Section 32E. Explanation. - For the removal of doubts, it is hereby declared that application filed before the Settlement Commission on or before the 31st day of May, 2007 shall be disposed of as if the amendment in this section had not come into force. (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Settlement Commission on receipt of an application. It, inter alia, provides that the Settlement Commission may make an order on the application after examination of the records, the report of the Commissioner of Central Excise, and after affording an opportunity to the applicant and the Commissioner of Central Excise to be heard, and after examining evidence as may be placed before it or obtained by it sub-section (8) of Section 32F specifically provides that the order passed by the Settlement Commission shall provide for the terms of settlement including any demand by way of duty, penalty or interest, and the manner in which the sums due under the settlement will be paid in order to make the settlement effective. sub-section (9) of Section 32H provides that if the duty, penalty, interest or fine as provided for in an order under sub-section (5) made by the Settlement Commission is not paid by the assessee within a period of 30 days from the receipt, of the copy of the order by him, the amount that has not been paid will be recovered along wall interest thereon as sums clue to the Central Government. Section 32H provides for the power of the Settlement Commission to re-open comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und in sub-section must be read in accordance with the scheme of Chapter XVA and its object and on so reading the aforesaid words used in sub-Section (2) we find that they are basically to give finality to the order of the Settlement, Commission as an order under the provision of the Act and similar to what an Adjudicating officer does. In fact, the expression "exclusive jurisdiction to exercise the power and perform the function of any officer of customs" is basically to look at the evidence and call for such evidence in order to determine whether the Settlement Commission should or should not accept the additional custom duty which the petitioner says is acceptable to him. The aforesaid expression, therefore, appearing in Section 127F(2) has to be read in the context, of the scope and the object of the Settlement Commission being to settle the matter by accepting the duty amount in and around the figure which the petitioner feels acceptable to him................" 8. In the present case it is observed that while seeking quashing of the impugned order dated 29th April, 2009 the petition also seeks complete immunity from penalty or in the alternative the benefit of reduced paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermining duty liability under the Excise Act. The order of settlement is in the form of a package and takes into consideration all the aspects of the case in a holistic manner before determining the issues of penalty and interest as well as the extent of immunity therefrom. It is in this context that sub-Section 5 of Section 32F confers on the Settlement Commission the powers to "pass such order as it thinks fit on the matters covered by the application...........". It is, therefore, observed that, the scheme of settlement, as contained in Chapter-V of the Excise Act is distinct, from the adjudication undertaken by a Central Excise Officer under the other Chapters of the Excise Act. Therefore, once the Petitioner has adopted the course of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit, under the proviso to Section 11AC of the said act. which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement, undertaken under the provisions of Chapter-V of the Act. 10. in view of the foregoing observations, we are of the opinion that there is no infirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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