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TMI Blog2022 (10) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts that may be relevant which are as follows: a) The appellant has two units. Unit-I is engaged in the manufacture of CTD Bars. MS Ingots and billets were manufactured in Unit-II. The MS Ingots/Billets was cleared from Unit-II to Unit-I on payment of duty, the duty so paid is taken as credit in Unit-I and set off against the duty paid in respect of clearances of CTD Bars manufactured in Unit-I. b) On 30.01.2006, there was an investigation by the Officers of the 3rd respondent along with the Officers of the 1st respondent during the course of which certain materials were seized which inter-alia included incriminating records, CPU of two computers, note-books and pocket diaries which indicated that there was clandestine removal of MS Ingots and CTD Bars/rods. c) The seized computers with the CPUs were kept in sealed boxes and opened in the presence of appellant/representatives. The data contained in the computer were copied in a hard disc and handed over to the Appellant. The hard disc was sent for imaging to the Government Examiner of Questioned Documents, (hereinafter referred to as ''GEQD''). d) A show cause notice was issued for the period April 2004 to February 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crease in production, shift-wise, heat-wise etc. d. The technical literature supporting the manufacturer's contention regarding the installed capacity of the furnace for manufacturing MS ingots. e. Production capacity of Unit No.I. f. Evidence if any, available for excess purchase of raw materials for manufacture of MS ingots that is accounted for in the statutory / private records. g. Evidence if any, available for unaccounted removal of quantum of goods i.e., MS ingots/CTD bars as alleged in the SCN? h. No. of days the factory was working during the impugned period and the period prior to and after the said period and evidence thereof. i. Any other independent evidence to corroborate the production clearance particulars of MS ingots/CTD bars found in the GEQD reports. j. Standard Input-output ratio / norms for manufacture of MS Scrap to MS Ingots & MS Ingots to CTD Bars / Rods and the applicant's ratio during the impugned period. Reasons for deviation / variation if any. k. Inter-unit transactions between Unit I & Unit II. l. The production trend of MS ingots during the impugned period and the period subsequent to the same may be arrived at and analysed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safety of men and machinery in jeopardy and the appellant's submission that though additional machinery had been purchased for increasing production however, for want of clearance from the Pollution Control Board, the same was not installed atleast during the relevant period in question. It was concluded in the 1st Report that during the period in issue, the production is likely to vary between 55000 M.T., to 59600 M.T., 7. The 1st Respondent Commission on receipt of the above Report dated 24.05.2012 vide order dated 29.4.2013 directed the Commissioner(Investigation) of the 1st Respondent Commission to conduct further investigation on the following aspects: (i) What is the actual data present in the seized hard disc? (ii) Whether the data present at the time of seizure underwent any alteration or whatsoever at the subsequent stages in the investigation involving the GEQD report? (iii) At the time of seizure the data in CPC was copied in 2 CDs as well. Examine the data in the CDs for its authenticity as primary evidence. (iv) Examine the applicant's contention that the fresh hard disc on which they were allowed to take copies of the data from seized hard disc by the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the hard disc sent by GEQD and kept with DGCEI for more than 10 days could have been tampered with to feed wrong information concluded that the investigation ordered on 29.04.2013 was only acceding to the request of the appellant for investigation relating to authenticity of GEQD Report. The 1st Respondent Commission after finding that the authenticity of the GEQD Report cannot be disputed, though the same was recorded as a "prima-facie" view in the light of the Commissioner's Report dated 21.06.2013, proceeded to remand the case to the Commissioner of Central Excise in terms of Section 32 L of the Central Excise Act, 1944 on finding that there was non-cooperation of the appellant, before the Bench, though the same was recorded as a prima facie view. 11. Aggrieved by the same, the appellant had challenged the order of the Respondent/ Settlement Commission by way of W.P.No.1962 of 2014 which came to be dismissed by the learned Single Judge. Against which, the appellant has preferred this appeal before the Division Bench of this Court. 12. Order of the learned Single Judge: i) The Revenue has established its case based on Investigation Report along with primary evidence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials on record. 16. We find that the challenge of the appellant may have to succeed for the following reasons: i) That the order of the 1st Respondent appears contrary to Section 32 F(4) of the Central Excise Act, 1944, insofar as it places reliance on the 2nd Report dated 21.06.2013. In this regard, the relevant portions of Section 32 F of the Central Excise Act, 1944, is extracted hereunder: "SECTION 32F.Procedure on receipt of an 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under subsection (3) or sub-section (4)." From a cumulative reading of the above provisions of Section 32 F of the Central Excise Act, 1944, the following position appears to emerge: a. That on receipt of an application under Section 32 F of the Central Excise Act, 1944, the Respondent Commission may issue the notice within 7 days from the date of receipt of such application seeking explanation from the applicant. The Commission shall pass orders after considering the explanation offered within a period of 14 days from the date of the notice. In case, no notice is issued or orders are passed within 14 days from the date of receipt of the explanation, the application shall be deemed to have been allowed to be proceeded with. b. Once an application is allowed/ deemed to have been allowed to be proceeded with under sub-section (1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the matter back to the Settlement Commission to consider the merits of the main application...." In the light of the above said order of this Court, the Bench observes the plea of the applicant deserves to be acceded to and investigation ordered in the case. The Bench, therefore, in exercise of the powers conferred on it under Section 32 F of the Central Excise Act, 1944 directs the Commissioner (Investigation) allotted to the Bench to conduct Investigation and make a comparison between the production capacity that would be ascertained by Commissioner (Investigation) and the Jurisdicational Commissioner's report on the same." 18. We intend to make it clear that we are not testing the legality of the 1st Report as neither parties to the Writ appeal have challenged the same and also the Report is stated to be made pursuant to and on the basis of the orders of this Court as would be evident from the extracts of the Report referred above. 19. Now we shall proceed to examine the legality of the 2nd Report. As seen from the analysis of Section 32 F(4) of the Act normally the power to call for additional information/enquiry/Report is postulated on receipt of a Report from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived within the timelines prescribed. It is trite law that when consequences of failure to comply with a prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory. (2008) 2 All ER 865 (H.L.). The periods prescribed in the Schedule to the Indian Limitation Act, 1908, for bringing a legal proceeding are mandatory as the consequence of the expiry of the period of limitation is provided by Section 3 of the Act in that the court is enjoined to dismiss a legal proceeding instituted after expiry of the prescribed period. Rajasekhar Gogoi vs. State of Assam, AIR 2001 SC 2315 : (2001) 6 SCC 46 (para 11). Similar result will follow if the Court or the forum is directed as in Section 24 A of the Consumer Protection Act, 1986 not to admit a complaint unless it is filed within the period prescribed. The question of limitation in such cases is a jurisdictional fact and has to be considered by the Court or forum even if not raised by any party Gannmani Anasurya vs. Parvatini Amarendra Chowdhary, (2007) 10 SCC 296. 21. Yet another reason which we would think vitiates the impugned order of the 1st Res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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