TMI Blog2019 (1) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... se notices issued to the parties on merits. However, notwithstanding the failure and non-satisfaction of the jurisdictional pre-conditions, the Settlement Commission proceeded to act as an adjudicating authority and has decided the show cause notice. This would be beyond the scope and power of the Settlement Commission, for the Settlement Commission is not an adjudicatory authority substituting the Central Excise Officer. The Settlement Commission must function under the four corners of the powers conferred under Chapter-V of the Act. The Settlement Commission, after expressing and recording the finding on the failure of the petitioners to make full and true disclosure of the duty liability and the manner in which it was derived, should have rejected the settlement application. The petitioners should have been relegated to suffer and undergo adjudication mechanism and procedure as per the provisions of the Act. The writ petitions are partly allowed, quashing the impugned orders passed by the Settlement Commission to the extent they adjudicate and confirm the demand raised in the show cause notice. - WP (C) 7277/2015, WP (C) 8939/2015, WP(C) 10013/2016, - - - Dated:- 20- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f jurisdiction of the Settlement Commission. Provisions for settlement under the Act were introduced w.e.f. 1st August, 1998, almost two decades after provisions for settlement of income tax cases were introduced on 1st April, 1976 by way of Chapter-XIX-A in the Income Tax Act, 1961, pursuant to partial implementation of the Wanchoo Committee Report. Settlement in tax matters is a compromise measure as the tax evader making full and true disclosure and paying taxes seeks forgiveness to avoid rigors of prosecution and penalty for himself, and the State benefits by accelerated recovery of taxes due without protracted litigation and cumbersome recovery proceedings. This act of atonement by the repentant assessee requires satisfaction of twin statutory requirements, which are a check on the possibility of misuse by descriptors. Applicant must disclose full and true hidden duty liability and the manner in which such liability was derived. 6. In Commissioner of Income Tax (Central) versus B.N. Bhattacharjee and Another, (1979) 4 SCC 121 , referring to essential requirement for seeking settlement under the Income Tax Act, the Supreme Court had emphasised that an assessee to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of Chapter XIX-A does not contemplate revision of the income so disclosed in the application against Item 11 of the form. Moreover, if an assessee is permitted to revise his disclosure, in essence, he would be making a fresh application in relation to the same case by withdrawing the earlier application. In this regard, Section 245-C(3) of the Act which prohibits the withdrawal of an application once made under sub-section (1) of the said section is instructive inasmuch as it manifests that an assessee cannot be permitted to resile from his stand at any stage during the proceedings. Therefore, by revising the application, the applicant would be achieving something indirectly which he cannot otherwise achieve directly and in the process rendering the provision of sub-section (3) of Section 245-C of the Act otiose and meaningless. In our opinion, the scheme of said Chapter is clear and admits no ambiguity. 36. It is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using Corporation and another(supra). It was a case in which the assessee had made certain disclosures in the initial application under section 245C(1) of the Act. Such disclosures were however, revised and additional income was disclosed in the revised annexures. The Apex Court held that the assessee had no right to revise an application under section 245C(1) of the Act and further that such revised annexure making further disclosure of undisclosed income alone was sufficient to establish that the initial application made by the assessee could not be entertained as it did not contain true and full disclosure of the undisclosed income and the manner in which such income had been derived . 8. We would now turn to the provisions of the settlement under the Act and begin by referring to Sections 32E, 32F, 32I, 32K, 32L, 32M, 32N and 32O of the Act:- Section 32E. Application for settlement of cases.- (1) 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 Settlement Commission, the application shall be deemed to have been allowed to be proceeded with. (2) A copy of every order under sub-section (1), shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. (3) Where an application is allowed or deemed to have been allowed to be proceeded with under sub-section (1), the Settlement Commission shall, within seven days from the date of order under sub-section (1), call for a report along with the relevant records from the Principal Commissioner of Central Excise or Commissioner of Central Excise having jurisdiction and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suo motu or when such error is brought to its notice by the jurisdictional Principal Commissioner of Central Excise or Commissioner of Central Excise or the applicant: Provided that no amendment which has the effect of enhancing the liability of the applicant shall be made under this sub-section, unless the Settlement Commission has given notice of such intention to the applicant and the jurisdictional Principal Commissioner of Central Excise or Commissioner of Central Excise as the case may be, and has given them a reasonable opportunity of being heard. (6) An order under sub-section (5) shall not be passed in respect of an application filed [****] after nine months from the last day of the month in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 32E had been made. Provided that the period specified under this sub- section may, for reasons to be recorded in writing, be extended by the Settlement Commission for a fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 32F, the Settlement Commission shall, until an order is passed under sub-section [(5)] of section 32F, have, subject to the provisions of sub-section [(4)] of that section, exclusive jurisdiction to exercise the powers and perform the functions of any Central Excise Officer, under this Act in relation to the case. (3) In the absence of any express direction by the Settlement Commission to the contrary, nothing in this Chapter shall affect the operation of the provisions of this Act in so far as they relate to any matters other than those before the Settlement Commission. (4) The Settlement Commission shall, subject to the provisions of this Chapter, have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers, or of the discharge of its functions, including the places at which the Benches shall hold their sittings. Section 32K. Power of Settlement Commission to grant immunity from prosecution and penalty. - (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 32E has co-operated with the Settlement Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it as if such materials, information, inquiry and evidence had been produced before such Central Excise Officer or held or recorded by him in the course of the proceedings before him. (3) For the purposes of the time limit under section 11A and for the purposes of interest under section 11BB, in a case referred to in sub-section (1), the period commencing on and from the date of the application to the Settlement Commission under section 32E and ending with the date of receipt by the Central Excise Officer of the order of the Settlement Commission sending the case back to the Central Excise Officer shall be excluded. Section 32M. Order of settlement to be conclusive. - Every order of settlement passed under sub-section [(5)] of section 32F shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force. Section 32N. Recovery of sums due under or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be stated. As per proviso to section 32-E(1) of the Act the application would not be maintainable unless returns showing production, clearance and Central excise duty paid in the prescribed manner have been filed; a show cause notice for the recovery of duty has been issued by the Central Excise Officer and the same has been received by the applicant; the additional amount of duty accepted as payable by the applicant exceeds ₹ 3 lacs and the additional amount of excise duty accepted by the applicant along with interest due under Section 11-AA has been paid. We need not refer to sub-Section (3), but sub-Section (4) is important and states that an application once made under sub-Section (1), shall not be allowed to be withdrawn. 9. At this stage itself, we may refer to Section 32-O which prohibits and bars a person from filing a second application for settlement where an order of settlement provides for imposition of penalty on the person who made the settlement application under Section 32-E; the applicant is subsequently convicted of any offence under the Act in relation to that case; or the applicant s case has been sent back to the Central Excise Officer on the ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f thirty days cannot be extended as the proviso states that where the report is not received within the aforesaid period, the Settlement Commission shall proceed further in the matter without the report from the Principal Commissioner/Commissioner of Central Excise. Where a report is received within the prescribed time, the Settlement Commission may after examination of the report if it is of the opinion that any further enquiry or investigation in the matter is necessary, for reasons to be recorded in writing within fifteen days of the receipt of the report, direct the Commissioner (Investigation) to make or cause to be made such further enquiry/investigation and furnish consequential report within a period of ninety days of receipt of the communication from the Settlement Commission on the matters covered by the application and any other matter relating to the case. As per proviso, when the Commissioner (Investigation) does not furnish their report within the aforesaid period, the Settlement Commission has to proceed to pass an order under sub-Section (5) without such report. These provisions with regard to the Commissioner(Investigation) in the Act are somewhat at variance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty or interest and the manner in which the said amount would be paid and all other matters to make the settlement effective and in case of rejection contain the reasons thereof and it shall also provide that the settlement should be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts. The proviso states that the amount settled as ordered by the Settlement Commission shall not be less than the duty liability admitted by the appellant in his application under Section 32-E. Sub-section (9) states that where any duty, interest, fine and penalty payable in pursuance of an order under sub-section (5) is not paid by the assessee within thirty days of receipt of a copy of the order by him the amount which remain unpaid shall be recovered along with interest due thereon as per provision of Section 11 of the Act. Sub-section (10) provides that where the proceedings become void on account of sub-section (8), proceedings before the Central Excise Officer shall be deemed to have been revived from the stage at which the application for settlement was allowed to be proceeded with. 12. Aforesaid provisions manifest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant to make full and true disclosure would be contrary to the legislative mandate. In many-a-case the Revenue would be aggrieved and would raise the same legal challenge to the order passed by the Settlement Commission. This would create uncertainty and confusion. In matter of jurisdiction it does not matter whether the aggrieved party is the assessee or the Revenue. The consequences when an applicant does not make full and true disclosure are provided in the provisions of the Chapter. Strict timelines with stage by stage hearing ensures a timely disposal and effectively checks machinations and delaying tactics. Such applicants have to be dealt with in the expeditiously, albeit in accordance with the statute. Settlement order is not an alternative to an order in original passed by the Central Excise Officer deciding a show cause notice on merits. 14. The provisions of Section 32-F do not stipulate and over-ride the conditions mentioned in Section 32-E that the assessee who has approached the Settlement Commission should and must make full and true disclosure of the duty liability which has not been hitherto disclosed. It is only when this condition and other requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no cases have been instituted against such parties for any differential duties. The Senior counsel has also contended that by making an adjudication, the Settlement Commission has deprived the petitioner of his right of appeal which he would have had in case the matter was adjudicated by the Adjudicating Officer in the first instance. 9. We find from the reading of the relevant Sections of Chapter XVA of the Customs Act that the Settlement Commission cannot substitute itself for the Adjudicating Officer by deciding complicated and highly disputed/contentious question and issues of facts. That this is not the purpose of the Settlement Commission, is clear from the following: (i) The expression settlement is in contradistinction to adjudication . The very scheme of the provisions of Chapter XV A is settlement and not adjudication: (ii) Various provisions such as Section 127B (1) uses the expression accepted to be payable by him , meaning thereby that on applicant before the Commission is bound basically only to the duty approximately in an around the amount accepted to be payable by the applicant and not the duty amount, which may be considerably or vastly diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riance and difference between the stand of the assessee and the Revenue. Referring to the provisions of settlement, it was observed that these are in contradistinction to adjudication and requirement to make payment of tax and interest and the expression accepted as payable by the applicant means the applicant before the Settlement Commission is bound basically to declare the duty evaded, which may be approximate or in and around the amount accepted to be payable by him. There should not be any difference between the amount of duty which he accepts as due and payable and the amount on which the matter is finally settled. This is because of the pre-condition that every applicant, in order to invoke the jurisdiction of the Settlement Commission must make full and true disclosure to have the case settled. It is in this context that in paragraph 10 of the aforesaid quotation in the case of Picasso Overseas Ors.(supra) , it has been observed that when an applicant comes for settlement, he cannot be fastened with a liability which he never intended as accepted to be payable by him. Therefore, when there are highly complex and contentious questions of fact, the Settlement Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department of Customs may still choose to go ahead and accept the figure of duty as acceptable by the applicant to the Commission as the said duty would be clearly born out from records of the Department of customs itself. 17. Identical provisions vide Section 32-I of the Act, dealing with powers and procedure of the Settlement Commission state that in addition to powers conferred on the Settlement Commission under Chapter V, the Settlement Commission shall have all powers that are vested in the Central Excise Officer under the Act or the Rules made there under. Sub-section (2) states that when an application has been allowed to be proceeded with under Section 32-F, the Settlement Commission shall have, until an order is passed under sub-section (5) to Section 32-F and subject to the provisions of sub section (4) of that section, exclusive jurisdiction to exercise the powers and perform the functions of a Central Excise Officer in relation to a case. Sub-section (4) states that the Settlement Commission shall, subject to the provisions of the Chapter, have power to regulate its own procedure and the procedure of Benches while dealing with matters. 18. We have not quoted Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material and information produced by the applicant/assessee before the Settlement Commission or the result of the inquiry held or the evidence recorded in the course of the proceedings before it as there is no bar or prohibition against use of the said material. Admission made by the applicant/assessee in the settlement application and evidence and details collected/ascertained can be used by the Assessing Officer when an order is passed remitting or sending the case back to the Central Excise Officer. The provision is another check on malevolent and devious applications with partial disclosure to deviate and prolong adjudication proceedings and recovery of duty and interest. These provisions of settlement reflect the vast powers given to the Settlement Commission when they verify and ascertain whether or not the applicant/assessee has made true and full disclosure of undisclosed income and decides the issues and lis that arise on the statements made in the settlement application, but they fall short and do not give jurisdiction to the Settlement Commission to reject the settlement application on the ground of lack of full and true disclosure of undisclosed income and then proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Komal Jain versus Union of India, 2014 (304) ELT 675 (Del.), which holds as under:- 16.The Court finds this argument unpersuasive. Clause (c) to the first proviso mandates a precondition to approaching the Settlement Commission. The duty accepted by the applicant must be paid, before the matter can even be considered by the Settlement Commission. The Settlement Commission is, in essence, a safe haven for applicants who are otherwise at risk of punishment under the penal provisions of the Customs Act. The Settlement Commission can if it considers it prudent grant immunity from prosecution, but may not condone the liability amount or interest. Those must be paid nonetheless, as an applicant approaching the Settlement Commission cannot receive better treatment than those who do not. That limited obligation falls on all articles imported into Indian territory. Thus, in order to approach the Settlement Commission, and avail of the beneficial regime of limited immunity, the applicant must as a reciprocal statutory good faith measure pay the liability duty (i.e. at least the minimum tax effect possible from the wide range of measures that may be exercised under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 28AB does not become due once a show-cause notice is served under Section 124 and, therefore, the petitioner should be allowed to approach the settlement commission without satisfying the condition. The legislative intention, however, appears to us to be otherwise. If one of the many conditions prescribed by the first proviso to Section 127B cannot be complied with, albeit because of statutory disability even assuming the petitioner is right in its contention that there is a statutory disability in calculating the interest due under Section 28AB the result would be that such a case was not intended to be covered by the section; it is not open to the petitioner to argue that because of the statutory disability (whatever that may be) one of those conditions cannot be complied with but yet the petitioner should be permitted to approach the Settlement Commission. As already pointed out, an assessee is permitted to approach the Settlement Commission subject to inviolable conditions, the proper and complete compliance with which cannot be compromised or condoned in any manner. Even on this score the petitioner as to fail. 23. Statute states that the Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction from the date the Settlement Commission steps into the shoes of the authority who was hitherto dealing with the case. The aforesaid ratio has to be read in the context in which they were made. The observations were not to hold that the Settlement Commission and Central Excise Officers perform same and identical functions. There could be cases where an assessee has made full and true disclosure of the undisclosed duty liability and the manner in which such liability was derived, yet issues that arise would require finding and decision in respect of rate of tax, tariff entry applicable, scope of exemption notification, entitlement to CENVAT credit etc. Such issues have to be decided by the Settlement Commission to settle the case. It is in this sense that requisite power under various provisions of Chapter-V has conferred power on the Settlement Commission. However, the Settlement Commission is not a Central Excise Officer. It does not perform functions and duties and is not an alternative to the Central Excise Officer. 26. The Settlement Commission is an independent institution and, in a way, is a quasi judicial body, independent and different from the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. If one reads section 245D(6) with section 245 I, it becomes clear that every order of settlement passed under section 245D(4) shall be final and conclusive as to the matters contained therein and that the same shall not be re-opened except in the case of fraud and misrepresentation. Under section 245F(1), in addition to the powers conferred on the Settlement Commission under Chapter XIX-A, it shall also have all the powers which are vested in the income tax authority under the Act. In this connection, however, we need to keep in mind the difference between procedure for assessment under Chapter XIV and procedure for settlement under Chapter XIX-A (see section 245D). Under section 245F(4), it is clarified that nothing in Chapter XIX-A shall affect the operation of any other provision of the Act requiring the applicant to pay tax on the basis of self-assessment in relation to matters before the Settlement Commission. 27. Having examined the legal position, we will now revert to the facts in the writ petitions. WP(C) No. 7277/2015 28. The petitioner, now renamed as M/s.Victora Auto Pvt. Ltd.,was engaged in the business of manufacturing of sheet metal components ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said entries included manufacturer s name. The goods received were entered in the register as well as the raw material register as per the procedure laid down in the factory of the petitioner. Reference was also made to the statement of Satya Dev Mishra, security guard/advisor of the petitioner who was posted on the entry gate. He had stated that as a security guard/advisor, he was posted on the entry gate and that he would check entry of goods and enter the goods received in the computer and issue inward statement with serial number. He had never seen raw material procured from M/s Allied Strips Pvt. Ltd., M/s JV Strips Pvt. Ltd. and M/s AGR Steel Strips Pvt. Ltd. Similarly, Mr. Sanjay Kaushik, working with the petitioner and incharge of inspection of raw material, after examining the inspection register, had stated that they had not inspected any goods received from M/s Allied Strips Pvt. Ltd., M/s JVS Pvt. Ltd. and M/s Asian Colour Coated Ispat Pvt. Ltd. There were only 9 reports of M/s AGR Steel Strips Pvt. Ltd. and one recorded invoice from M/s MTC. Impugned order of the Settlement Commission refers to the show cause notice on the CR sheets, standard stainless sheets and alu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the payment side entries recorded in the diary of Shri Pawan Goel only. They have not been able to convincingly controvert the evidence from their own internal record and statements of various employees, read with the entries in kaccha papers and the diaries 23.1 The applicant has contravened the provisions of the Cenvat Credit Rules by taking inadmissible Cenvat credit during the period 01.03.2007 to 21.12.2010 on the basis of invoices without receipt of goods with the intent to evade payment of Central Excise duty. They are, therefore, liable to penal action under Rule 15(1) and 15(2) of the Cenvat Credit Rules, 2004. Co-applicant no.1, Shri Hardeep Singh Banga, Director of the applicant himself received huge amounts of cash from Shri Purushotam Lal Gupta and Shri Pawan Goel as reverse payment of cheques. He, therefore, personally benefited apart from the applicant from the illegal activities which he was aware of. He is, therefore, liable to penal action under Rule 26 of the Central Excise Rules, 2002. 23.2 Shri Purushotam Lal Gupta, co-applicant no. 6 appears to have been the mastermind who organized the goods less Cenvat invoices on commission basis as he was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission held: 24. The Bench on careful consideration finds that the different defences of the applicant are not at all convincing. Revenue has been able to show, on the basis of supplementary evidence, that the amounts flowing back were more than that appearing in the diaries and the few kaccha papers seized. Since a one to one co relation was not given by the applicants, who have admitted that there was some goods less invoices and that an amount did flow back without clearly giving which invoices and which amounts correlate, the Bench is unable to accept their contentions as to the quantum of goods less invoices. The Bench observes that the applicant has mostly cooperated with the investigation as well as in the proceedings before the Commission. They voluntarily paid a substantial part of the duty evaded during the investigation. In view of the facts and circumstances of the case, the Bench hereby settles the case on the following terms and conditions: Duty:- The wrongly availed Central Excise cenvat credit is settled at ₹ 2,16,70,002/-against the applicant. An amount of ₹ 80,14,397/- deposited by the applicant is ordered to be appropriated towards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Iceberg Foods Ltd.( IFL for short), who was engaged in the manufacturing of various variants of packaged drinking water of different brands, aerated water and carbonated drinks of various brands. Pet-preforms were used by IFL to manufacture pet bottles. Both the petitioner and IFL were subjected to search operations by the Director-General of Central Excise Intelligence and incriminating material and documents, including CPU, pen drives, laptops etc. were seized and statement of different persons were recorded. 36. Duty of ₹ 3.51 crore demanded in the show cause notice for pet-preforms clandestinely removed from the factory of the petitioner during the period January, 2007 to August, 2009, was calculated on the basis of purchase of 2864.800 M.T. of pet resin procured through M/s Prayag Polymers, M/s Guru Kripa International and M/s.Bhaiji International. Petitioner had stated that the IFL and similar bottlers had filed settlement application, accepting their duty demand and interest liability. Some other bottlers were in the process of filing settlement applications. On the question of calculation of duty liability, the petitioner in the application for settlement had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drinking water (PDW) without proper invoice and without paying central excise duty. It is also true that the pet preforms have been used as input by such manufacturers and bottlers of packaged drinking water (PDW), in their manufacturing process, and who have cleared their finished products clandestinely without proper invoice and without paying central excise duty. It is also not in dispute that some of such manufacturers and bottlers have approached the Settlement Commission and have had their cases settled by admitting their duty liability and have paid the same alongwith interest. 9.1 The Bench finds that the applicant has admitted, against a duty demand of ₹ 3,51,82,322/- detailed in the SCN, to a duty liability of ₹ 3,04,001/-, on such quantity of pet preforms which, as per the applicant, were clandestinely cleared and on which no manufacturer has paid duty. The applicant has contended that the rest of the demand is included in the demands made to manufacturers and bottlers. The Ld Advocate has argued that if the applicant is made to pay duty of ₹ 3.51 crores demanded in the SCN, the facility to avail cenvat credit may also be extended to the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has, in effect, argued that duty on the clandestinely removed pet preforms should not be demanded from him as the recipients of the pet preforms have paid duty on their finished goods i.e. PDW which includes the cost of the input pet preforms. The Bench also notes that none of the manufacturers and bottlers who approached the Settlement Commission for settling their case, made any plea for allowing them the facility of availing cenvat credit on that part of the excise duty that was based on the value of petpreforms procured from the applicant. The applicant as a separate entity cannot make such a plea on their behalf. 9.5 As stated above, the applicant have not contested the SCN and as such it has to be held that they have accepted the allegations contained therein. As such they are liable to pay central excise duty demanded in the SCN. For the reasons discussed in the foregoing paragraphs, the Bench does not extend the facility of availing cenvat credit by the manufacturers and bottlers. Even in the case of any supplementary by the applicant, the exception in Rule 9 (1) (b) of CCR 2004 receivers of pet preforms to take any credit of duty paid by the paid by the applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in manufacture of Copper Ingots and Copper Wire Rods. 41. As per the Revenue, the petitioner had clandestinely removed finished goods, viz. copper ingots by suppressing production, with an intent to evade payment of duty. The petitioner had also wrongfully availed of CENVAT credit on in-admissible capital goods. The petitioner had been subjected to search by the officers of the Preventive Wing of the Central Excise on 22.5.2012. Records and evidence with regard to clandestine removal were seized. Thereafter, show cause notice date 16-18.3.2015 was issued for recovery of excise duty of ₹ 57,05,370/-(as not paid on 98212.65 Kg. of Copper Wire Rods/Ingots); wrongful claim of CENVAT credit amounting to ₹ 1,53,512/- and wrongful claim of CENVAT credit amounting to ₹ 6,10,06,458/- as availed of without receiving the raw materials. Interest payable on the above amounts was demanded. The show cause notice had asked the petitioner to answer why the penalty should not be imposed. Show cause notice was also issued to the Director of the petitioner company to answer why penalty should not be imposed. 42. The petitioner had filed settlement application on 23.9.2015 alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to applicants premises leave no doubt that the 1288.036 Mts of raw material on which applicant has availed cenvat credit M/s Chandra Proteco Ltd (U- II), Si1vassa of ₹ 6.10 crores, was never received by the applicant and therefore the cenvat credit of ₹ 6.10 crores on the basis of invoices issued by M/s Chandra Proteco Ltd (U- II), Silvassa has been incorrectly availed by the applicant. The contention of the applicant that they had received the entire raw material as shown in the invoices of M/s Chandra Proteco Ltd (U- II), Silvassa and had used that raw material to manufacture finished goods stands totally demolished. Applicant has thus not come clean before the Settlement Commission and his admission of total liability of ₹ 48,13,658/- is incorrect. 42. In such a situation, where the evidence available on record clearly shows that the applicant is not admitting correct liability after having applied for settlement, we are confronted with the peculiar situation, to settle the case or to remand it for adjudication. Hon ble High Court of Delhi dealing with a similar situation in WP No.21961 2008 has observed that: As already pointed out the petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in our minds that the applicant has not received any goods at all from M/s Chandra Proteco Ltd.(D-II) on which he has availed Cenvat credit of ₹ 6.10 Crores. 44. Thereafter, the Settlement Commission had passed the following order under Section 32F(5) of the Act:- 46. In view of the above, and the facts and circumstances of the case, the Bench settles the case under Section 32F (5) of the Act on the following terms:- Central Excise Duty:- The Central Excise Duty in this case is settled at: (i) ₹ 42,49,584/- in respect of clandestine removal of 73152.65 kg of Copper wire rods not received from job worker and sold without payment of duty. (ii) ₹ 14,55,786/- in respect of difference in closing balance of Copper Scrap on 31.3.12, and opening balance as on 1.4.12. (iii) Cenvat credit amounting to ₹ 1,53,512/- availed incorrectly on ineligible capital goods is ordered to be recovered from the applicant. (iv) The wrongly availed Cenvat credit amounting to ₹ 6,10,06,458/- is ordered to be recovered from the applicant. Out of the said, the applicant has claimed to have discharge duty liability of ₹ 48,13,6581 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission is not an adjudicatory authority substituting the Central Excise Officer. The Settlement Commission must function under the four corners of the powers conferred under Chapter-V of the Act. The Settlement Commission, after expressing and recording the finding on the failure of the petitioners to make full and true disclosure of the duty liability and the manner in which it was derived, should have rejected the settlement application. The petitioners should have been relegated to suffer and undergo adjudication mechanism and procedure as per the provisions of the Act. 46. Learned counsel for the petitioners, Iceberg Aqua Pvt Ltd Ors in WP(C) No.8939/2015 and K M G Rolling Pvt. Ltd. Anr. in WP(C) No.10013/2016 had stated that the petitioners would have to face the adjudication proceedings pursuant to the show cause notice. Orders in this regard remitting the case to the Central Excise Officer may be passed. However, learned counsel for the petitioner SDL Auto Pvt. Ltd. in WP(C) No.7277/2015 had submitted that the matter should be remanded to the Settlement Commission. We would observe that once the Settlement Commission had concluded that the petitioner had not made f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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