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TMI Blog2017 (9) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... nsport agency as defined in the Finance Act 1994 ('FA'). The Petitioner in WP (C) 2047/17 is one of the directors of the Petitioner in WP (C) 2053/17. Pursuant to a search conducted on 18th July, 2012, a showcause notice ('SCN') dated 18th October 2013 was issued to the Petitioners to produce their records and also show cause why service tax, which the Petitioners had failed to deposit, should not be recovered. Interest and penalty was also sought to be levied. Since there is only one SCN issued to both the Petitioners i.e., as Noticee No.1 and Noticee No. 2, they are together referred to as `Petitioner' hereinafter. 3. The Petitioner had deposited the service tax demanded along with interest and filed an application before the Settlement Commission on 5th December, 2016. On 6th December, 2016, the Petitioner also informed the Commissioner of Central Excise ('Commissioner') of this fact. While the application filed before the Settlement Commission was pending scrutiny, the Petitioner was also served an adjudication order passed by the Commissioner on the SCN. The said order was dated 2nd December, 2016 but was dispatched on 7th December, 2016 and was received by the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Settlement Commission has to, within a period of 7 days from the date of receipt of the application, issue a notice to the applicant to explain in writing as to why the application be proceeded with and thereafter, within a period of 14 days from the date of the notice, pass an order to either proceed with the application or reject it. 8. Mr. Narula points out that Section 32F of the CEA also creates a deeming fiction that if the order is not passed within 14 days from the date of notice, the application would be deemed to have been proceeded with. Thus, as per Mr. Narula, during these two periods - first, 7 days and then 14 days, the jurisdiction of the Settlement Commission is not exclusive. He further submits that the question is whether the proceedings which are pending adjudication ought to be considered at the time when the order to `proceed with' the application is to be passed. Mr. Narula thus submits that the order having been passed on 2nd December, 2016 and having been dispatched on 7th December, 2016, the Settlement Commission has rightly rejected the Petitioner's applications. 9. Mr. Narula also took this Court through the chronology of events to show that the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986). (3) Every application made under sub-section (1) shall be accompanied by such fees as may be prescribed. (4) An application made under sub-section (1) shall not be allowed to be withdrawn by the applicant. Section 32F - Procedure on receipt of 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 applicant to explain in writing as to why the application made by him should be allowed to be proceeded with, and after taking into consideration the explanation provided by the applicant, the Settlement Commission, shall, within a period of fourteen days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application as the case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection: Provided that where no notice has been issued or no order has been passed within the aforesaid period by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Settlement Commission at the point when it considers as to whether the application should be proceeded with, is of a much larger conspectus i.e. to determine whether the application is in accordance with law. The Settlement Commission at this stage does not have the discretion to simply reject the application on the basis that an order by the adjudicating authority has come to be passed post the filing of the application for settlement before the Settlement Commission. Any other interpretation would defeat the purpose of the terms 'proceeding under this Act...pending before the adjudicating authority on the date on which the application under sub-Section (i) of Section 32E is made' and 'before adjudication' as contained in Section 31 (c) and 32E of the Act, respectively. 15. So long as the application has been filed prior to the order of the adjudicating authority, it will not be open to the Settlement Commission to reject it merely on the ground that an order has been passed subsequently by the adjudicating authority i.e. during the intervening period - from the date of filing till the date of passing of the order on the application to be proceeded with or rejection there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Central Excise dated 13 January 2011 is also set aside...." 18. That the adjudicating authority can deal with the proceedings pending before it prior to the order being passed by the Settlement Commission on whether to proceed with the settlement proceedings, is not an issue that arises in this case. 19. There is no doubt that under the scheme of the CEA, the adjudicating authority has to, under Section 32F (3), call for a report from the Principal Commissioner of Central Excise or the Commissioner of Central Excise in respect of the adjudicating proceedings pending before them. However, under Sections 32F (1) and 32F (2), the Settlement Commission gets exclusive jurisdiction only after the order is passed by the Settlement Commission to proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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