TMI Blog2014 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity etc. The contention that the Commission has not examined the merits of the case is also not sustainable, as a bare reading of the order passed by the Commission would reveal that the merits of the case has been gone into and this Court is not inclined to go into the factual aspects of the matter, as it has to be adjudicated on merits. As long as the petitioner has failed to fulfil the twin essential tests as pointed out earlier, the application before the Settlement Commission was not maintainable and therefore, the Commission was fully justified in refusing to entertain the application. - writ petition dismissed - Decided against the assessee. - W. P. No. 30162 of 2012 and W. P. No. 15706 of 2014 - - - Dated:- 26-11-2014 - T. S. Sivagnanam,JJ. For the Petitioner : Mr. K. Jayachandran for Mr. S. Senthilnathan For the Respondents : Mr. V. Sundareswaran CGSSC for RR1 2 ORDER The petitioner in both the Writ Petitions is a private limited company engaged in the manufacture of MS Ingots falling under Chapter 72 of the Central Excise Tariff. The petitioner is a registered with the Central Excise Department falling under the control of the second respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd locally purchased scraps were properly accounted in the raw material register, which were subject matter of investigation by the officers of the second respondent and that the petitioner had informed 26340.907 MTs of MS Scrap imported and purchased locally. The petitioner availed the benefit of the concession rate of duty extended under Customs notification No.21 of 2002, dated 01.03.2002. The condition in the said notification was that the importer has to submit an End-use certificate in the prescribed format certifying that the imported scrap had been actually utilised in the manufacture of final products. According to the petitioner, they have obtained end-use certificate for the quantity imported under 64 Bills of entry. However for the remaining 10 Bills of entry, they did not obtain any end-use certificate. The petitioner would state that the jurisdictional officers of Central Excise have clearly certified that the petitioner have consumed the imported material for manufacturing MS-Ingots. The petitioner would further state that the allegation in the second show cause notice was based on the statements recorded from High Sea Sellers, Customs House Agent, Container freight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terim order was granted in this writ petition. 7. In the light of the fact that there was no interim order granted in this writ petition, the second respondent called upon the petitioner to participate in the adjudication proceedings. It is stated by the petitioner that the pendency of W.P.No.30162 of 2012, was informed to the second respondent and it was stated that though no stay was granted, the Writ Petition has been admitted and the same is pending disposal and therefore, requested the second respondent not to proceed further. However, the second respondent passed the order dated 15.04.2014, confirming the proposal in the show cause notice dated 27.10.2009. This order is impugned in W.P.No.1507 of 2014 and the Writ Petition was admitted on 10.06.2014 and an order of interim stay was granted initially for a limited period and subsequently, ordered to be continued. 8. The learned counsel for the petitioner reiterated the factual contentions, which were placed before the Settlement Commission and contend that in respect of quantity covered in 64 bills of entry, the petitioner had produced end-use certificate and in respect of the quantity covered in 10 bills of entry, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e figures appearing in the books of accounts of third parties cannot determine the actual despatch and receipt of books and the petitioner was able to establish during cross examination that the out-standing dues in the petitioner's books of accounts are correct. Further, it is submitted that the allegation against the petitioner of non-utilisation of the imported scrap covered under the 64 bills of entry has no basis in the absence of proper evidence for allowing the diversion imported scrap, when there are end-use certificate issued by the jurisdictional Central Excise Officer. Therefore, it is submitted that the order passed by the Settlement Commission is liable to be set aside and the petitioner's case should be considered by the Settlement Commission on merits afresh. 11. As regards the impugned order in W.P.No.15706 of 2014, it is submitted by the learned counsel that the impugned order is in violation of the principles of natural justice and came to be passed inspite of the fact that the petitioner informed the department that W.P.No.30162 of 2012, was pending and department was directed to file counter affidavit. Further, it is submitted that the legality and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not made true disclosure and rejected the application and directed the matter to be adjudicated under Section 32L of the Act, this Court will not entertain a Writ Petition and direct the Settlement Commission to consider the matter afresh, when the Commission has specifically recorded that there was no true disclosure. Further, it is submitted that there is no allegation of any violation of principles of natural justice or provisions of law and in such circumstances, the Writ Petition filed by the petitioner is not maintainable. In this regard, reliance was placed on the decisions of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, Jalpaiguri vs. Om Prakash Mittal reported in (2005) 184 ELT 3(SC), and Union of India Ors., vs. Ind-Swift Laboratories Ltd., reported in (2011) 40 VST 1 (SC). 14. On the merits of the matter, the learned counsel made elaborate reference to the reports/comments filed by the Commissioner stating that four Import Scrap Registers were seized from the factory premises of the petitioner on 14.06.2006, under Mahazar Sl.No.42 to 42 4/4 which contain inter-alia the vehicle registration numbers under which the imported consignmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crap did not accompany form XX to the petitioner. 16. Further, it is submitted that according to the above reports of the RTOs, certain vehicle registration numbers as appearing in the above 4 seized registers, were that of Motorcycles, Cars, Tankers etc, which are incapable of transporting such heavy consignment of Scrap. It is seen that the petitioner in their Import Scrap registers, have recorded registration numbers of cars, two wheelers, tankers and trailers which are incapable of transporting LMS/HMS scrap. From this, it is clear that the consignments of MS Scrap purportedly delivered to the petitioner have actually been diverted and that the petitioner have recoreded certain imaginary vehicle registration numbers to show as if the consignments have been delivered at their factory premises in order to improperly avail CENVAT credit. 17. Further, the learned counsel referred to the findings recorded by the Settlement Commission in paragraph 7.6 and submitted that the Settlement Commission noted the nature of fraudulent transaction and recorded a clear finding of fact that the petitioner has not made true and complete disclosure. In such circumstances, the question of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra), this Court interfered, since the application was rejected by the Settlement Commission at the threshold without even calling for a report from the Commissioner. The decision in the case of M/s.Shri.Renuga Soft-X Towels Ors., (supra), is also clearly distinguishable on facts and not applicable to the case of the petitioner. 19. Heard the learned counsels appearing on either side and perused the materials placed on record. 20. The first question to be considered is as to whether this Court exercising jurisdiction under Article 226 would be justified in interfering with the order passed by the Settlement Commission in the light of the fact that there is no allegation made by the petitioner that there is any violation of principles of natural justice. The object of establishing a procedure for settlement of cases under the provisions of the Central Excise Act as well as the Customs Act was with a view to resolve the dispute by conferring powers on the Settlement Commission to settle the matters. However, the Settlement Commission does not grant immunity as a matter of course and exercise of its jurisdiction is discretionary. Even in cases, where the Settlement Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maining 10 bills of entry, they have admitted the duty liability. Therefore, the petitioner would state that it is a full and true disclosure of the duty liability, which was not admitted before the proper officer. This contention is wholly misconceived and this appears to be the case of the petitioner right through. 23. The full and true disclosure of duty liability in fact is that which was not disclosed before the proper officer. For which purpose, the allegation in the show cause notice against the petitioner has to be looked into. The allegation is wrong availment of CENVAT credit stating that investigation conducted, revealed that the petitioner imported MS Scrap and diverted the same in the local market and various other allegations have been made in the show cause notice as to how the goods imported never reached the factory gate and that the end-use certificate was issued based on the raw material register maintained by the petitioner and the range superintendent did not visit the factory for verification of the receipt of the raw material and that the issue of end-use certificate alone does not prove the receipt of the imported raw material and such certificate is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l tests as pointed out earlier, the application before the Settlement Commission was not maintainable and therefore, the Commission was fully justified in refusing to entertain the application. 28. The Hon'ble Supreme Court in the case of Shriyans Prasad Jain vs. ITO reported in [1993] 204 ITR 616, held that the Court cannot go into the questions of fact recorded by the Settlement Commission. This decision was followed by the Hon'ble Division Bench of this Court in the case of S.V.Shankar vs. Settlement Commission (Income-tax and Wealth-Tax) Anr., (supra). As pointed out by the Hon'ble Division Bench of the Bombay High Court in the case of Santogen Textile Mills Ltd.,(supra), a conjoint reading of sub-sections (a),(b) (7) of Section 32F of the Act, would make it clear that the basic purpose of getting report, is to find out as required under Section 32E(1) in the application preferred before the Settlement Commission has been made or not and if the Settlement Commission finds that full and true disclosure has not been made in the application as required under Section 32E(1), then it is open for the Settlement Commission to reject the petition, while passing the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in calling upon the petitioner to participate in the adjudication proceedings. When notices were issued, the petitioner appeared and stated that the Writ Petition in W.P.No.30162 of 2012, was pending and the matter may be adjourned. However, this request was not entertained and the respondent proceeded to adjudicate the matter, since it was informed to the respondent that there was no stay of adjudication granted by this Court in W.P.No.30162 of 2012. 33. In my view, though the Commissioner cannot be faulted for proceeding with the adjudication proceeding, nevertheless when a specific request was made stating that the earlier Writ Petition was pending and it was also admitted, it would have been fair and reasonable, if the matter was kept in abeyance or atleast a outer time limit could have been afforded to the petitioner, so as to move this Court and secure an order of stay of adjudication or to expedite the hearing of the other Writ Petition. However, the same having not been followed, this Court is of the view that the impugned order dated 15.04.2014, is in violation of principles of natural justice, inasmuch as the petitioner was not afforded full and effective opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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