TMI Blog2013 (5) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... misses is that proceedings before the adjudicating officer were pending. Assessee was still to obtain copies of the documents which were relied upon in the show cause notice. Despite the assessee informing the Commissioner, that it had paid the filing fee and would file the settlement application within a week, the Commissioner proceeded to pass an order in utter haste. Therefore the settlement application which was filed by the assessee before the date of the dispatch of the order of adjudication is maintainable before the Settlement Commission. The settlement application shall accordingly stand restored to the file of the Settlement Commission for further disposal in accordance with law. Thus, the petition is allowed. - Writ Petition No. 1402 of 2012 - - - Dated:- 15-3-2013 - DR. D. Y. Chandrachud And A. A. Sayed, JJ. For the Petitioner : Mr. M. H. Patil with Ms. Aparna Hirandagi For the Respondents : Mr. Y. M. Bhate with Mr. S. D. Bhosale JUDGMENT (Per DR. D. Y. Chandrachud, J.) :- 1. Rule; with the consent of Counsel for the parties returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated its earlier request for disclosure of documents and informed the adjudicating officer that it was exploring the possibility of filing a settlement application. Since the Petitioner was yet to obtain copies of the documents, it requested that the adjudication may be held in abeyance for a period of three or four weeks. On 10 January 2011, the Petitioner's Advocate addressed a letter to the Commissioner specifically stating that a decision had been taken to file a settlement application under Section 32E of the Central Excise Act, 1944. Together with the letter, which was received by the Commissioner on the same day, the Petitioner enclosed a copy of the GAR-7 challan reflecting the payment of the fee for filing of the settlement application. The letter indicated that the Petitioner was working out the duty liability together with interest since it was required to be paid before the filing of an application before the Settlement Commission. The letter recorded that the Petitioner would file an application for settlement of the case probably within that week itself and requested the Commissioner to keep the adjudication proceedings in abeyance, until a settlement applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility 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, undervaluation, inapplicability of exemption notification or CENVAT credit or otherwise 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) 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 duty 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 subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he words before adjudication . 8. The Supreme Court had occasion to consider similar issues in the context of a variety of statutory provisions. In certain situations a statutory provision may set out a period of limitation to seek recourse to a remedy against an order. Where the making of the order provides for the commencement of limitation, the issue arises as to when the order is said to be made. In Raja Harish Chandra Raj Singh vs. Deputy Land Acquisition Officer (1962 ) 1 SCR 676, the Supreme Court construed the provisions of Section 18(1) of the Land Acquisition Act, 1894, the proviso to which stipulates that where the person seeking a reference was not present before the collector at the time when the award was made, the period of limitation would be six weeks of the receipt of the notice from the Collector under Section 12(2) or within six months from the date of the award of the Collector whichever expires first. The Supreme Court held that where the rights of a person are affected by an order and limitation is prescribed for the enforcement of a remedy by the person aggrieved against the order by reference to the making of the said order, the making of the order must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation can be filed before adjudication, to the Settlement Commission. An application before the Settlement Commission is not maintainable after adjudication. A purposive interpretation has to be placed on the expression before adjudication . An adjudication cannot be regarded as being complete merely upon the signing of an order by the adjudicating authority. If the adjudicating authority were to keep the order in his own drawer without dispatching it to the assessee the latter would have no means of knowing of the making of the order. An order of adjudication must be placed by the adjudicating authority out of his control by dispatching it to the assessee. For it is once that stage is achieved that the adjudicating authority ceases to have any locus penitentiae. Once the authority dispatches the order, the adjudicator places it out of his control. There can be no possibility then of the adjudicating authority tearing off the order or making a different order. 11. As a principle of interpretation, it is well settled that while the charging provisions of a taxing statute are to be construed strictly, provisions which lay down a machinery have to be construed so as to make it wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority may back date an order. Adjudicating authorities are not supposed to behave in this manner and are presumed to function within the boundaries of law but, these things can happen. Would not a literal construction of the provisions then come in aid of such errant officers and run counter to the legitimate hopes of assessees who want to come clean, pay their taxes and have their cases settled by the Settlement Commission? The answer to this would lie in construing the date of adjudication to be the date on which the adjudicating authority loses his locus poenitentia, or opportunity to tear off, destroy or alter the adjudication order. In other words, when the order goes out of his control. And, that happens when the order is signed and the one-way process of sending it to the assessee is put in motion either directly or indirectly through some other agency. We respectfully concur with this view. 13. In the present case, the detailed narration of events in the order of the dissenting member of the Settlement Commission would indicate that on 13 September 2010, 28 September 2010 and 15 December 2010, the Petitioner had sought before the adjudicating offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication under Section 32E must be given a purposive interpretation. The object of Section 32E is to enable an assessee to come before the Settlement Commission with a clean, complete and candid disclosure and with a payment of the excise duty with interest. A literal construction of the words before adjudication would defeat the purpose and intent of Parliament. As this case itself shows, the Commissioner proceeded in undue haste, without waiting for the supply of documents to the assessee and even after being informed that the assessee was in all probably moving the Settlement Commission during the course of the week. The majority of the Settlement Commission was of the view that there was no reason for the assessee not to have filed a settlement application before 13 January 2011. What this view clearly misses is that proceedings before the adjudicating officer were pending. The assessee was still to obtain copies of the documents which were relied upon in the show cause notice. As a matter of fact, two letters had also been addressed to the DGCEI by the Superintendent (Adjudication) for such a disclosure on 29 October 2010 and 10 January 2011. Despite the assessee informing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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