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TMI Blog2022 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... earch proceedings were triggered, it appears, based on intelligence gathered by the respondent/revenue that zarda was being manufactured by using six (6) pouch packing machines. 2.3 This led to the matter being investigated which culminated in the issuance of show cause notices. Insofar as petitioner nos.1, 2 and 5 are concerned, they were served with a show cause notice dated 14.08.2015. Likewise, the petitioner nos.1, 3 and 4 were served with show cause notice dated 29.11.2016. 2.4. Insofar as the show cause notice dated 14.08.2015 was concerned, a corrigendum was issued on 27.03.2017. The corrigendum was limited to the aspect of noticees' being required to file their response qua the aforementioned show cause notice(s), with the Assistant Commissioner, Central Excise, Division, Nayyer Colony, Civil Lines, Faizabad, U.P. as against the Commissioner, Central Excise Commissionerate, Ashok Nagar, Lucknow. 2.5. It is not disputed by learned counsel for the parties that each of the petitioners filed applications before the Settlement Commission. Learned counsel for the parties say that these applications are dated 04.07.2017. The Settlement Commission, based on the applications, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2019. 6. We are in respectful agreement with the judgment rendered in SDL Auto Pvt. Ltd. The relevant observations made by the coordinate bench of this court in the said judgement are set forth hereafter: "9. Out of the total duty demand of Rs. 11,80,12,105/-, along with interest, (being the sum total of the demands of Rs. 11,43,09,554/-, Rs. 10,32,559/- and Rs. 26,86,992/-) as demanded and proposed in the Show Cause Notice, the settlement application admitted duty liability of Rs. 1,56,11,930/- and interest of Rs. 44,17,956/-. xxx xxx xxx 10. 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 concealment of particulars of his duty liability. It is, therefore, clear that the provisions of settlement can be invoked by the assessee/applicant by making "full and true' disclosure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Settlement Commission in the proceedings before it, the case may be sent back to the Central Excise Officer having jurisdiction who shall thereupon dispose of the case in accordance with the provisions of the Act as if no application for settlement had been made. Thus, the provision states that the Settlement Commission has the power and authority to remit the case to the Central Excise Officer when the applicant has not cooperated. Sub-section (2) to Section 32-L is equally important for it states that the Central Excise Officer shall be entitled to use all materials and other information produced by the applicant/assessee before the Settlement Commission or the result of the inquiry held or the evidence so recorded in the course of the proceedings before it. Thus, the Central Excise Officer can use the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement Commission to issue a notice, to the applicant, requiring him to explain, in writing, as to why the application be allowed to be proceeded with and, after taking into consideration the explanation provided by the applicant, to pass an order, allowing the application to be proceeded with, or rejecting the application. Where the order, passed under sub-section (1) allows the application to be proceeded with, sub-section (3) requires the Settlement Commission to, within 7 days of the order passed under sub-section (1), call for a report from the Principal Commissioner, or the Commission of Central Excise. After examining the said report, the Settlement Commission is required, by sub-section (4) to, if necessary, direct further investigation by the Commissioner (Investigation) and, thereafter, proceed to pass an order, in terms of sub-section (5). Sub-sections (4) and (5) of Section 32F are reproduced herein below: 32F. Procedure on receipt of an application under section 32E. - ***** (4) Where a report of the Commissioner called for under-subsection (3) has been furnished within the period specified in that sub-section, the Settlement Commission may, after examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Section 32F(5) of the 1944 Act will come to the aid of the respondents/revenue, that position, in our view, is not correct. Once the Settlement Commission comes to a conclusion that there has been no true and fair disclosure of facts and the manner in which the liability has been derived, the Settlement Commission, in our opinion, cannot then proceed to adjudicate the liability. 8.2. This emerges upon a plain reading of Section 32E1 of the 1944 Act. Unless the twin conditions mentioned therein are fulfilled, the Settlement Commission cannot move further in the matter. The Settlement Commission is, necessarily, then required to remit the matter to the concerned statutory authority. 9. We may note that, in this case, the petitioners have got practically no benefit in approaching the Settlement Commission, as the quantum of liability which was indicated in the aforementioned show cause notice(s) is practically what has been the thrust on them via impugned orders. 10. Having regard to the aforesaid, we are of the view that the impugned orders cannot be sustained. The impugned orders are, accordingly, set aside. 10.1. Consequently, the notice of demand dated 06.04.2018 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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