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TMI Blog2013 (5) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... since the application for settlement was filed on 14 January 2011, a day after the order of adjudication dated 13 January 2011, it was not maintainable under Section 32E. The third member of the Settlement Commission has however held, following the judgment of a Division Bench of the Delhi High Court in Qualimax Electronics Private Limited vs. Union of India, 2010 257 ELT Page 42 that an order of adjudication is made on the date on which the adjudicating authority dispatched it to the assessee and since the date of dispatch was after the filing of the settlement application, the application was maintainable. 3. The Petitioner is engaged in the manufacture of excisable goods falling under Chapter 72 of the Central Excise Tariff. On 24 June 2010, a notice to show cause was issued to the Petitioner by the Additional Director General, DGCEI, Mumbai, demanding differential duty of Rs.1.73 crores under Section 11A(1) of the Central Excise Act, 1944 and CENVAT credit amounting to Rs.8.77 lakhs together with interest. During the course of the adjudication proceedings, the Petitioner sought copies of documents, which were relied upon in the notice to show cause, by a letter dated 9 Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on 19 January 2011. 4. On these facts, a majority of two members of the Settlement Commission held that under Section 32E, an application to the Settlement Commission has to be filed by an assessee to have a case settled before adjudication. The majority held that the settlement application, which was filed on 14 January 2011, was not maintainable since the Commissioner had already adjudicated upon the notice to show cause on 13 January 2011. In the view of the majority, though the Petitioner had informed the Commissioner by a letter during the course of the hearing on 8 January 2011 of his intention to file settlement proceedings, the settlement application was filed "as late as on 14 January 2011". The majority held that there was no explanation as to why the Petitioner had not filed the settlement application between 24 June 2010 and 13 January 2011. Hence the application was held to be not maintainable. On the other hand, the dissenting member of the Settlement Commission held that in view of the judgment of the Delhi High Court in Qualimax Electronics Private Limited (supra), an adjudication is complete upon the adjudicating authority placing the order of adjudication beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E is made: Provided that when any proceeding is referred back in any appeal or revision, as the case may be, by any court, Appellate Tribunal or any other authority, to the adjudicating authority for a fresh adjudication or decision, as the case may be, then such proceeding shall not be deemed to be a proceeding pending within the meaning of this clause; 7. Section 32E stipulates that an assessee may, in respect of a case relating to him, make an application before adjudication to have the case settled. The assessee is, however, required to make a full and true disclosure of its liability which has not been disclosed to the Central Excise officer, the manner in which such liability has been derived, the additional amount of excise duty which is accepted to be payable and such other particulars as may be described. The expression "case" is defined to mean any proceeding under the Act or in any other Act for the levy, assessment or collection of excise duty which is pending before an adjudicating authority on the date on which an application under Section 32E(1) is made. Section 32E provides two points in time which define the maintainability of an application before the Settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act, 1944 that if an authority is authorised to exercise a power or to do an act affecting the rights of the parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made; that is to say when the adjudication officer ceases to have any authority to tear it off and draft a different order and when he ceases to have any locus penitentiae. 9. These decisions have been made having regard to the statutory provision involved and the underlying purpose and object of the provision. The common thread in the line of authority is that a purposive meaning has to be ascribed to the making of an order. Where an authority, by making an order affects the rights of parties, the order or decision takes effect from the date on which the order or decision assumes a character such that the maker of the order places it out of his control. Where the statute provides a period of limitation for challengin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction. Gursahai v. CIT, AIR 1963 SC 1062, p.1064 One important consideration in construing a machinery section is that it should be so construed as to effectuate the liability imposed by the charging section and to make the machinery workableut res magis valeat quam pereat. N.B. Sanjana v. Elphinston Spinning & Weaving Mills, AIR 1971 SC 2039, p. 2047 Similarly a machinery provision which enables the assessee to avail of a concession or benefit conferred by a substantive provision in the Act is liberally construed. C.I.T. v. Kulu Valley Transport Co. Pvt. Ltd., AIR 1970 SC 1734 And on the same principle statutory provisions touching and conferring a right of appeal have to be read in a reasonable, practical and liberal manner. Commissioner of Income-tax, A.P. v. Ashoka Engineering Co., AIR 1993 SC 858, p. 860" 12. In Qualimax Electronics Private Limited (supra), a Division Bench of the Delhi High Court, after referring to the judgments of the Supreme Court on the subject, held that under Section 32E the adjudication of a case by an adjudicating authority closes the window of opportunity which the assessee had for seeking a settlement of the case. The Delhi High Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 2011, the Advocate for the Petitioner informed the Commissioner that the Petitioner had decided to file a settlement application and produced a copy of the GAR-7 Challan reflecting the payment of the fee for filing the settlement application. The Commissioner was informed that the duty and interest components were being worked out and the settlement application would be filed probably within that week itself. On 11 January 2011, a further letter was addressed by the Superintendent (Adjudication) to DECEI for supply of the documents relied upon in the notice to show cause. However, the Commissioner, without waiting for receipt of the documents of which disclosure was sought and without paying heed to the request of the assessee proceeded to pass an order of adjudication in haste on 13 January 2011. The order was actually dispatched to the assessee on 19 January 2011 when the assessee had already moved a settlement application on 14 January 2011. The adjudicating officer put his order of adjudication out of his control by dispatching it to the assessee only after the filing of the settlement application. In these circumstances, the settlement application could not have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispatch of the order of adjudication is maintainable before the Settlement Commission. 15. In view of the aforesaid finding, we allow the petition by setting aside the order of the Settlement Commission dated 18 January 2012 holding that the settlement application was not maintainable. The settlement application shall accordingly stand restored to the file of the Settlement Commission for further disposal in accordance with law. 16. In consequence we also set aside the order of the Commissioner of Central Excise dated 13 January 2011 since we have held that the application which was filed before the Settlement Commission on 14 January 2011, prior to the dispatch of the order of adjudication, was maintainable. We clarify that we have done so without expressing any opinion on the merits of the allegations contained in the show cause notice issued to the assessee. Unless this consequential relief were to be granted as prayed, two parallel proceedings would result, namely (i) arising out of the order of the Commissioner of Central Excise and, (ii) before the Settlement Commission which the statute does not contemplate. Hence, for these reasons the order of the Commissioner of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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