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2016 (4) TMI 1067 - CALCUTTA HIGH COURT

2016 (4) TMI 1067 - CALCUTTA HIGH COURT - 2016 (334) E.L.T. 402 (Cal.) - Entitlement of Settlement of a Case - Introduction of the "Explanation" to section 32-O(I)(i) of the Central Excise Act, 1944 - Whether with the introduction of the "Explanation" to section 32-O(I)(i ) there was a change in law with regard to the one time bar under the said section? - Held that:- As the earlier four show cause notices were issued prior to the introduction of the "Explanation" by Finance Act (N). (No.2) ACT .....

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which provides "An assessee may, in respect of a case relating to him, make an application, before adjudication, to the Settlement Commission to have the case settled, 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,." (Emphasis supplied). Therefore, under section 32E(1) an application for settlement can be filed before the Commission where the .....

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As seen "Explanation" introduced is a reiteration of the statutory provisions in section 32E(1). Hence, the "Explanation" is clarificatory in nature. Therefore, as the bar under section 32-O(1)(i) was always in vogue, the submission in this regard on behalf of the respondent is unacceptable. - Pursuant to the notice to show cause dated 25th May, 2010 for the period 3rd July, 2008 to 9th September, 2008, the respondents had filed an application for settlement on 22nd July, 2010 which was dis .....

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ed, does not come to the aid of the respondents herein, that is the writ petitioners. In this context it is to be noted that a show cause notice was issued on 11th November, 2011 and the respondent had filed an application for settlement on 16th May, 2012 admitting the duty liability which was disposed of by order dated 12th October, 2012 by imposing penalty. - As under section 32-O(1)(i) the bar to file subsequent application was always in vogue, in view of the clear finding in detail by th .....

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ion 32M, are conclusive. That apart, as evident from the records, the respondents had accepted each of those orders passed by the Settlement Commission. It is clear from the order dated 28th March, 2014, particularly paragraphs 24 and 35 thereof, that earlier on four occasions the respondent herein was found guilty for concealment of duty particulars and penalty was imposed which the learned Judge had overlooked and thus erred in passing the judgement under challenge. - The judgment and orde .....

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y, this judgment is delivered separately. This appeal has been preferred by the Commissioner of Central Excise and Service Tax, Durgapur Commissionerate, against the judgment dated 26th August, 2014 passed in W.P. 393 of 2014 (Rohit Ferro Tech Limited and others versus Settlement Commission and others) whereby the learned Single Judge had disposed of the writ petition by passing the following order:- "In this case four show-cause notices were dealt with by the Settlement Commission at an ea .....

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mediately before the commencement of section 122 of the Finance Act, 2007 (22 of 2007) or sub-section (5) of section 32F,] provides for the imposition of a penalty on the person who made the application under section 32E for settlement, on the ground of concealment of particulars of his duty liability; ………. then, he shall not be entitled to apply for settlement under section 32E in relation to any other matter." The Commission has no doubt held in paragraph 24 of its or .....

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to him make an application after issuance of the show-cause notice but before adjudication, to the Settlement Commission to have the case settled. Such application has to be in a prescribed form with full and true disclosure of the applicant's duty liability which has not been disclosed before the Central Excise Officer having jurisdiction. Now, if there is any concealment in that application and a penalty has been imposed by the Settlement Commission on the ground of such concealment, then .....

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light of the above observations and if it is found that the penalty has not been imposed on the writ petitioner in an application for settlement under Section 32E, on the ground of concealment of particulars of their duty liability in that application, then the Commission will proceeded to consider their case on merits. This writ application is accordingly disposed of." Mr. R.N. Das, learned senior advocate for the appellant had submitted that it is apparent from the judgment under challeng .....

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ders. Under section 32M of the Act those orders passed under section 32F(5) are conclusive and binding on the respondent and cannot be reopened. As it was found by the authorities that the respondents herein were again indulging in clandestine manufacture and clearance of goods, show cause notice dated 7th May, 2013 was issued. It was the fifth show cause notice. The respondent filed an application for settlement admitting removal of finished goods without payment of duty and deposited a sum of .....

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challenge. Had the respondents been aggrieved with the fifth show cause notice, instead of filing applications for settlement, they should opted for adjudication under the Act. Mr. Sudhir Kumar Mehta, learned advocate for the respondents, that is the writ petitioners, submitted that as revenue laws have to be construed strictly and since the Commission in its order dated 28th March, 2014 did not specifically hold that earlier penalty was imposed for concealment of particulars of duty liability, .....

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er section 32-O(1)(i) does not apply to the respondent. According to him with the introduction of sub-section 2 to section 32-O with effect from 1st June, 2007 which was omitted on 8th May, 2010 by Act 14 of 2010, the one time approach was removed and thus even if earlier penalty was imposed for concealment of particulars of duty liability, an application for settlement was maintainable. The learned advocate for the respondent had relied on the following judgments:- 1) Sedco Forex International .....

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td.: 2011(265) ELT 3(S.C); 8) Exotica Global Pvt. Ltd. v. Union of India: 2015(319) ELT 31 (Cal) and 9) Vinod Kumar Mathur v. Union of India: 2015(322) ELT 107 (Bom). The issues which require consideration are:- i) Whether with the introduction of the "Explanation" to section 32-O(I)(i ) there was a change in law with regard to the one time bar under the said section; ii) Whether with the introduction of sub-section (2) to Section 32-O with effect from 1st June, 2007, subsequently omit .....

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(1)] [Where, [***]]- (i) an order of settlement passed under sub-section (7) of section 32F [, as it stood immediately before the commencement of section 122 of the Finance Act, 2007 (22 of 2007) or sub-section (5) of section 32F,] provides for the imposition of a penalty on the person who made the application under section 32E for settlement, on the ground of concealment of particulars of his duty liability; or [Explanation.- In this clause, the concealment of particulars of duty liability rela .....

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tion (1) of section 32F, such assessee shall not be entitled to apply for settlement under section 32E in relation to any other matter: Provided that such assessee shall not be prevented from filing an application for settlement if the issue in the subsequent application is, but for the period of dispute and amount, identical to the issue in respect of which the earlier application is pending before the Settlement Commission." In order to answer the issues it is appropriate to refer to para .....

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secution. Again in 2010, vide their Application No.606/2010 dt. 22nd July, 2010, they again approached the Settlement Commission in respect of a case involving removal of 841 M.T. Ferro Chrome and Slllcon Maganese without payment of Central Excise Duty. The duty in this case was settled at ₹ 1,27,32,650/- along with interest payable. A penalty of ₹ 5 lakhs was also imposed on M/s. Rohit Ferro-Tech Ltd. and they were granted immunity from prosecution. Thereafter on 12.04.2011, M/s. Ro .....

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on 16th February, 2012, vide their application No.803/2012. In this case, they had incorrectly availed Cenvat Credit amounting to ₹ 30,83,857/-. The duty in this case was settled at ₹ 30,83,857/- along with applicable interest. A penalty of ₹ 1,50,000/- was imposed on M/s. Rohit Ferro-Tech Ltd. The Bench also granted immunity from prosecution. Now, M/s. Rohit Ferro-Tech Ltd. have again approached the Settlement Commission under Application No.953 of 2013 which involves evasion .....

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ase of the applicant earlier. In three of these cases, penalty has been imposed on the applicant. First time, penalty was imposed on them, vide order dated 26.11.2010 and after that two more applications from them were admitted and also settled by the bench. This is in contravention of the provisions of section 32-O(1)(i) of the Central Excise Act, 1944. M/s. Rohit Ferro-Tech Ltd. stood debarred from applying to the Settlement Commission in any matter after 26.11.2010, when a penalty was imposed .....

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are not eligible to apply to Settlement Commission in any matter and the application filed by M/s Rohit Ferro-Tech Ltd. as well as the applications filed by co-applicants are liable to be rejected. Accordingly, the applications no.953 to 955/2013 are bereby rejected. 30…………….. 31…………….. 32…………….. 33…………….. 34. We agree with the Learned Member (Shri Karan K. .....

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n order passed under Section 32F(5) of the Central Excise Act, 1944 in respect of an application filed under Section 32E of the Act. The present case of M/s. Rohit Ferro-Tech Limited is also a case where the applicant, in earlier cases, was show caused for demand of duty interest and penalty. Penalty was imposed by the Settlement Commission. It has been held by the 3-Member Bench in the case of M/s. Shkambhri Overseas Trade Private Limited that the bar of Section 32O(1)(i) of the Act applied in .....

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s no jurisdiction to entertain such an application as it is barred by Section 32)(1)(i) of the Central Excise Act, 1944 and is liable to dismissal, without going into the merits of the case. The applications of the co-applicants cannot be settled with the main applicant is not eligible to come before the Settlement Commission. In terms of Section 32O(1)(i) of the Central Excise Act, 1944, without going into the merits of the case, all the applications(main applicant as well as co-applicants) are .....

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s at the plain language of section 32-E(1) of the Act. The "Explanation" in section 32-O(I) (i ) stating that "the concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer" is in aid to and evidently in consonance with the opening part of the provisions contained in section 32-E(1) which provides "An assessee may, in respect of a case relating to him, make an application, before adjudication, to the Settlement Comm .....

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filing a subsequent application for settlement where he has suffered an order passed under section 32F(5) and therein the "Explanation" has been introduced that the concealment of particulars of duty liability "relates to any such concealment made from the Central Excise Officer". Thus, "Explanation" in 32-O(1)(i) is consistent with the statutory intent in section 32-E(1). As seen "Explanation" introduced is a reiteration of the statutory provisions in se .....

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dentical to the issue" was "pending" before the Commission when any of the subsequent applications were filed. To put the facts in proper perspective, it is to be noted that the Commission had disposed of the first application of settlement filed on 22nd August, 2005 by order dated 3rd March, 2006 by directing the respondents to pay duty of Central Excise. Thereafter, pursuant to the notice to show cause dated 25th May, 2010 for the period 3rd July, 2008 to 9th September, 2008, th .....

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n" on the "identical" issue was "pending" before it. Hence, the section 32-O(2) since deleted, does not come to the aid of the respondents herein, that is the writ petitioners. In this context it is to be noted that a show cause notice was issued on 11th November, 2011 and the respondent had filed an application for settlement on 16th May, 2012 admitting the duty liability which was disposed of by order dated 12th October, 2012 by imposing penalty. So far as the third is .....

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by the Commission dealing specifically with the earlier proceedings and the orders passed thereon, as noted hereinbefore. The said orders, under section 32M, are conclusive. That apart, as evident from the records, the respondents had accepted each of those orders passed by the Settlement Commission. It is clear from the order dated 28th March, 2014, particularly paragraphs 24 and 35 thereof, that earlier on four occasions the respondent herein was found guilty for concealment of duty particula .....

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