TMI Blog2014 (8) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) on the matters covered by the application. It cannot, therefore, be asserted that once the application filed under sub-section (1) of section 32-E has been allowed to be proceeded with under sub-section (3) of section 32-F, the Settlement Commission has necessarily to make a settlement. If that was so, then in that event power would not have been conferred on the Settlement Commission under sub-section (8) of section 32-F to reject the application. Since a complaint had been filed under section 200 of the Code of Criminal Procedure in which charges had been framed on 10 December 2013, the officers, with a mala fide intention made attempts to ensure that the case was not settled. The officers have not been impleaded by name as party respondents and even otherwise the allegations are very vague and have not been substantiated. The Settlement Commission has given good and cogent reasons for sending the case back to the adjudicating authority. The Settlement Commission noticed that the applicants had not accepted a substantial part of the duty liability and had in fact contested the evidence collected by the Revenue as being fabricated and tampered with. It also noticed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the stocks of finished goods and raw materials kept in both the Units; records recovered from the residential and office premises of Siddharth Dixit; and the documents recovered from M/s. Anand Sales, Kanpur, the department quantified the total duty evaded by both the Units during the period August 2006 to June 2009 as under: Sr. No. Items M/s. Vinay Wires and Poly Products Pvt. Ltd., B-4, UPSIDC Industrial Area, Site-II, Rania, Kanpur Dehat (M/s VWPPPL-I) (Duty in Rs.) M/s. Vinay Wires and Poly Products Pvt. Ltd., C-2, C-5, UPSIDC Industrial Area, Site-II, Rania, Kanpur Dehat (M/s VWPPPL-II) (Duty in Rs.) TOTAL 1. Duty liability quantified on the basis of Parallel Invoices 13,94,292/- 33,54,426/- 47,48,718/- 2. Duty liability quantified on the basis of shortages detected. 10,70,530/- 92,840/- 11,63,370/- 3. Duty liability quantified on the basis of record recovered from Siddharth Dixi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) Imposition of penalty under rule 15(2) of Cenvat Credit Rules, 2004 read with section 11 AC of the Act. Penalty was also proposed to be imposed under rule 26 of the Central Excise Rules, 2002. The petitioners allege that the said search was conducted on the basis of information provided by an ex-employee who had given five files to the officers of the DGCEI who had planted them in the premises of the petitioner during the search operation. The petitioners also allege that the Director was detained in the office for 48 hours and mercilessly beaten up by the officers. A confessional statement was also taken from them under threat. As soon as the petitioner no.2 (the Director) was released on 2 July 2009, he retracted the statements through affidavits which he sent through speed-post to the DGCEI. On 10 November 2009, petitioner no.2 and one Siddharth Dixit were arrested from a hotel in New Delhi and produced before the concerned Magistrate on 12 November 2009. A complaint under section 200 of the Code of Criminal Procedure was filed by the petitioner in the Court of Additional Chief Metropolitan Magistrate, Delhi against the vigilance officers and Deputy Director in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash sales was specifically denied. In fact what was stated was that the net liability, in addition to the deposit of ₹ 30 lacs earlier deposited, worked out to ₹ 63,85,052/- which had also been paid. A prayer was also, accordingly, made for grant of immunity from penalty and prosecution. The Settlement Commission in accordance with the provisions of section 32-F issued notice to the applicants on 4 February 2013 and on receipt of a reply, passed an order dated 15 February 2013 for proceeding with the applications. Copies of the applications were then forwarded on 18 February 2013 to the Commissioner of Central Excise and Service Tax, Kanpur and the DGCEI for submission of their reports as was required under section 32-F. The DGCEI submitted its report on 16 April 2013. The Revenue reiterated the facts stated in the show cause notice and objected to the allegations made in the applications and submitted that three were issues involved namely : (i) The clandestine clearance made by the factories of the applicant under parallel invoices, admitted by the applicant; (ii) The clandestine sales shown in the data maintained by Shri Siddharth Dixi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appreciation of evidence on both sides. The Bench also observed that since the applicant has disputed the very basis of the investigation, the disclosure cannot be said to be complete and true. The Bench, therefore, observes that this case would be better settled through adjudication. In view of the above, the Bench order to send the case back to the adjudicating authority in terms of Section 32(F)(5) of the Act. Learned counsel for the petitioners placed emphasis on section 32-L which deals with the power of Settlement Commission to send a case back to the Central Excise Officer and submitted that since there is no allegation in the impugned order that the applicants had not co-operated with the Settlement Commission, the Settlement Commission was not justified in law in sending the case back to the adjudicating officer even if there was no disclosure of full and true facts. Learned counsel also submitted that even if complex questions involving facts were required to be determined after appreciation of evidence, then too nothing prevented the Settlement Commission from settling the matter instead of sending it back to the adjudicating authority and once the application had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 of excisable goods under the Central Excise Tariff Act, 1985(56 of 1986). Section 32F - Procedure on receipt of an application under section 32E. (1) On receipt of an application under sub-section (1) of section 32E, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (5) without such report. (5) After examination of the records and the report of the Commissioner of Central Excise received under sub-section (3), and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under sub-section (4), and after giving an opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub-section (5) or sub-section (4). (6) An order under sub-section (5) shall not be passed in respect of an application filed on or before the 31st day of May, 2007, later than the 29th day of February, 2008 and in respect of an application made on or after the 1st day of June, 2007, after nine months from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Central Excise having jurisdiction. On receipt of the report from the Commissioner, the Settlement Commission, may, 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) to make or cause to be made such further enquiry or investigation and furnish a report to the Commission. Sub-section (5) of section 32-F then provides that after examination of the records and the report of the Commissioner of Central Excise and the report, if any of the Commissioner (Investigation), the Settlement Commission may pass such order as it thinks fit. Sub-section (8) of section 32-F postulates that the order passed under sub-section (5) shall provide for the terms of settlement and in case of rejection, contain the reasons therefor. 18. It is in the light of the aforesaid provisions that the contentions advanced by learned counsel for the petitioners require consideration. 19. The first contention is that the Settlement Commission could have sent the case back to the adjudicating authority only if it was of the opinion that any person who made an application for settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners cannot also be accepted. Under sub-section (1) of section 32-E, the applicant is required to make a full and true disclosure of his duty liability and merely because the Settlement Commission has, after considering the explanation offered by the applicant, allowed the application to be proceeded with under sub-section (1) of section 32-F, will not mean that the Settlement Commission has accepted that the applicant has made full and true disclosure of his duty liability because that is not the stage to make such an inquiry. It is clear from sub-section (3) of section 32-F that it is only when an application is allowed to be proceeded with that the Settlement Commission shall call for a report along with the records from the Commissioner of Central Excise having jurisdiction. It is after examination of the records and the report of the Commissioner of Central Excise that the Settlement Commission, after giving an opportunity to the applicant and to the Commissioner of Central Excise to be heard, is required to pass an order as it thinks fit under sub-section (5) on the matters covered by the application. It cannot, therefore, be asserted that once the application filed under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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