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TMI Blog2013 (1) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants' employees as well as from a few dealers. They also recovered certain private books and print outs at the premises of some of the dealers which allegedly contained details of actual prices chargeable for the plywood and of cash collected over and above the price indicated in 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the proceedings initiated by the show cause notice. It took note of the fact that the Commissioner of Central Excise, Visakhapatnam had passed an adjudication order even after the application for settlement was filed by the appellant and held that the said order 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 16. The Tribunal vide final order No.1080-1083/07 dated 06-09-2007 impugned in these appeals held that there was no question of the Settlement Commission acquiring exclusive jurisdiction when an order of adjudication was passed before the admission of the application 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 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Commissioner should have deferred adjudication of the matter. (b) that under Section 32-I (2) of the Act, where an application made under Section 32E has been allowed to be proceeded with under Section 32-F, the Settlement Commission (until an order is passed under sub section (7) of Section 32-F) has the exclusive jurisdiction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him make an application 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under sub-section (1) allowing the application to be proceeded with, pay the amount of additional duty admitted by him as payable and shall furnish proof of such payment to the Settlement Commission. (4) If the Settlement Commission is satisfied, on an application made in this behalf by the assessee that he is unable for good and sufficient reasons to pay the amount referred to in sub-section (3), within the time specified in that sub-section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments, if the assessee furnishes adequate security for the payment thereof. (5) Where the additional amount of duty referred to in sub-section (3) is not paid by the assessee within 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 Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers and perform the functions of any Central Excise Officer, under this Act in relation to the case." 23. In our view under clause (7) of Section 32F of the Act, the Settlement Commission after considering the records and the reports of the Commissioner of Central Excise and Commissioner (Investigation) received under sub section (1) and under sub section (6) respectively and after hearing the parties may pass an order on (i) the matters covered by the application and (ii) any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of the Central Excise and the Commissioner (Investigation) under sub section (1) or sub section (6). 24. Admittedly in the report submitted under sub section (1) of Section 32F of the Act to the Settlement Commission on 13-09-2004, the Commissioner of Central Excise stated that the matter had already been adjudicated by him in his Order in Original No.14/2004 dated 30-07-2004 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 appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the command of the decree. A decree passed by a Court of competent jurisdiction cannot be denuded of its efficacy by any collateral attack or in incidental proceedings." 26. As this portion of the order of the Settlement Commission dated 31-05-2005 was admittedly not challenged by the Revenue in W.P.No.21055 of 2005 or in S.L.P.No.4715 of 2006, the Revenue is barred by the principle of constructive resjudicata from reagitating the said finding of the Settlement Commission before the Tribunal collaterally. The Tribunal therefore is bound to proceed on the footing that the order dated 30-07-2004 of the Commissioner is non est in law and therefore it ought to have held in the impugned orders that the Revenue could not have challenged the order dated 30-07-2004 of the Commissioner in the appeals E/888/2005 and E/890/2005 before it. It should have therefore rejected the said appeals filed by the Revenue as not maintainable. 27. As the Settlement Commission in its final order dated 17-01-2007 had rejected application for settlement and remitted the case back to the adjudicating authority for adjudication of the matter in terms of the show cause notice dated 01-11-2003, the said author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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