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2016 (6) TMI 14 - DELHI HIGH COURT

2016 (6) TMI 14 - DELHI HIGH COURT - 2016 (337) E.L.T. 175 (Del.) - Dismissal of settlement application - Demand towards Cenvat credit wrongly availed - CCESC opined that the applicant has not cooperated with the CCESC in the proceedings before it - Difference between the applicant and the Department on an issue arising from the application - Held that:- the Court finds that both in the order dated 9th June, 2014, rejecting the first application and the subsequent order dated 3rd September, 2014 .....

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be rejected are restricted to those set out in Section 32-F (1) and Section 32-L of the CE Act. Therefore, for these reasons, this Court sets aside the impugned order of the CCESC rejecting the first application and the order passed by it rejecting the second application. The order passed by the CCESC, to the extent of correcting the mistake as noted does not call for interference. - Petition disposed of - W.P.(C) 1068/2016 - Dated:- 27-5-2016 - S. MURALIDHAR & VIBHU BAKHRU JJ Fo .....

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d by the Customs and Central Excise Settlement Commission ('CCESC') under Section 32F of the Central Excise Act, 1944 ('CE Act') dismissing the settlement application filed by the Petitioner under Section 32E of the CE Act. 2. A search took placed in the premises of one Mr. Pawan Goel on 22nd December, 2010 as a result of which certain books and registers were seized. The statement of Mr Goel was also recorded. Consequent thereto the Petitioner's premises were sea .....

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3. On 27th June, 2013, the Petitioner filed an application (hereinafter referred to as the 'first application') before the CCESC under Section 32E(1) of the CE Act. In this application, the Petitioner accepted a duty liability of ₹ 1,97,69,622/- and interest of ₹ 96,01,968/-. It is stated that the documents seized by the ITD were enclosed with this application. It was contended that the figures contained in the diary maintained by Mr Rai should form the basis of the settleme .....

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ed by Mr. Rai, which had been seized. 5. By the order dated 7th April, 2014, the ITSC allowed the application for settlement to be proceeded with under Section 245D(1) of the IT Act. The Petitioner then filed an application on 21st April, 2014 before the CCESC seeking to bring on record the aforementioned order dated 7th April, 2014 passed by the ITSC. On 9th June, 2014, the CCESC passed a final order rejecting the first application of the Petitioner seeking settlement under the CE Ac .....

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uot;better settled through adjudication". 6. On 27th June, 2014, the Petitioner filed a second application (hereinafter referred to as the 'second application') before the CCESC this time declaring a sum of ₹ 2,59,05,014/- towards Cenvat credit wrongly claimed and interest of ₹ 1,19,30,190.41/-. The stand of the Petitioner was that the entries in the diary of Mr. Rai represented an accurate and comprehensive enumeration of the transactions undertaken by it. < .....

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that Mr. Rai's diary was not before it and, therefore, there was no occasion to revisit the earlier order dated 9th June, 2014 remanding the matter to the adjudicating authority. 9. On 23rd December, 2014, the Petitioner filed an application for rectification of mistake made in the order dated 3rd September 2014 as regards the observation that the diary of Mr. Rai was not before the CCESC. A further application in this behalf was filed on 1st June, 2015. 10. By order .....

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oner referred to Section 32F of the CE Act as well as Section 32L thereof and submitted that none of the grounds on which the application could be rejected by the CCESC exist in the present case. Relying on the decisions in SSF Plastics India Pvt. Ltd. v. Union of India 2015 (325) E.L.T. 837 (Bom.) and Cineyug Worldwide v. Union of India (decision dated 22nd January, 2016 of the Bombay High Court in WP No.2474/2015), he submitted that with the Petitioner having made a full and true disclosure of .....

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tering the above submissions, Ms. Sonia Sharma, learned counsel for the Department referred to Section 32M of the CE Act, which states that every order of the CCESC under Section 32F(5) of the CE Act shall be conclusive as to the matters stated therein and could not be reopened under the CE Act or any other law for the time being in force. She also referred to Section 32L of the CE Act and sought to support the order of the CCESC. 13. At the outset it requires to be noticed that in i .....

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14. The fact of the matter is that for rejection of an application made to it there are only a few grounds available to the CCESC. Under Section 32F (1) of the CE Act, the CCESC may reject an application even at the preliminary stage if it is of the view that a full and true disclosure has not been made of the material facts by the Petitioner. If, however, the CCESC decides to proceed with the application then the grounds on which it can decline to entertain the application, as stated in Section .....

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for adjudication to the Central Excise Officer because of the differences between the applicant on the one hand and the Department on the other. In other words unless the applicant before it has not stated the true and full particulars or fails to cooperate with it, the CCESC cannot decline to examine the application on the ground that there is difference between the applicant and the Department on an issue arising from the application. 15. There is no finding in the impugned order o .....

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artment on the other. In that case the CCESC rejected the settlement application stating that it could not examine the case without going into a 'lot of details of the dispute'. The High Court while disapproving the order of the CCESC observed as under: 10. If such an approach is adopted, the very purpose of setting up a Commission and enabling settlement of disputes expeditiously and promptly is defeated. That is to encourage settlement of claims which are long overdue and by .....

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