TMI Blog2022 (12) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... er dealt with these allegations in the appeal memo. He was given an opportunity before the Commissioner when the Order-in-Original was passed. Therefore, if the Settlement Commission has taken note of these facts to hold against the Petitioner, it cannot be said there was any breach of principles of natural justice. The second contention is that even assuming there was a removal of goods to DTA without permission, the benefit of cum duty price could not have been denied to the Petitioner - The Settlement Commission has referred to the decision of the Hon'ble Supreme Court in the case of AMRIT AGRO INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., GHAZIABAD [ 2007 (3) TMI 14 - SUPREME COURT] and the decision of ASIAN ALLOYS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2006 (7) TMI 404 - CESTAT, NEW DELHI] and SARLA POLYESTER LTD. VERSUS COMMISSIONER OF C. EX. [ 2007 (11) TMI 47 - CESTAT AHMEDABAD] . The Tribunal has held that since all sales were clandestinely done in contravention of the provisions of EXIM Policy and Rules applicable to the 100% EOU, there is no scope to treat the sale price as a cum duty price. Apart from this, the Tribunal has also hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is a 100% Export Oriented Unit (EOU) engaged in the manufacture of vegetable extracts under Chapter 13 of the First Schedule of the Central Excise Tariff Act, 1985 and, on necessary terms, carries out manufacturing in bond as per the provisions of the Customs Act, 1962. A Show Cause Notice was issued to the Petitioner on 28 June 2005 by the Additional Commissioner of Central Excise, Raigad, that during the period December 2002 to June 2003, the Petitioner cleared goods valued at Rs.59,76,771/- into Domestic Tariff Area (DTA) without permission, without preparing invoices, and through a defunct entity and evaded payment of duty. Show Cause Notice proposed demand of duty of Rs.33,96,718/- under proviso to Section 11A(1) of the Central Excise Act along with interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944. The Managing Director of the Petitioner was called upon to show cause why the penalty under Rule 26 of the Central Excise Rule, 2002 be not imposed. There was no response to the Show Cause Notice. The Additional Commissioner took note of the statement of the Director of the Petitioner recorded under Section 14 of the Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Settlement Commission will have to be kept in mind. In the case of N. Krishnan v/s. Settlement Commission ILR 1990 KAR 404 , the Division Bench of the Karnataka High Court considered the issue in detail in the context of the Settlement Commission under the Income Tax Act. The Division Bench observed that the Settlement Commission is a Tribunal and the judicial review is maintainable. As regards the scope of interference, the Division Bench observed that the Settlement Commission was constituted to settle the complicated claims and to allow the evaders to have the matters settled once and for all. It is not a forum for challenging the legality of assessment orders or orders passed in any other proceedings. The power conferred on the Settlement Commission is broad and it has the power to give immunity against prosecution or imposition of penalty. The Division Bench opined that the Settlement Commission's decision could only be interfered with if grave procedural defects such as violation of the mandatory procedural requirements of the statute and breach of principles of natural justice are made out, or if there is no nexus between the reasons given and the decision taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t account for the production and clearance of the same in the records of M/s. Viva Herba Ltd. Thus, these clearances were clandestine, unauthorized and fraudulently done in the name of M/s. Specialty Neutracuticals (SN). Therefore, by obvious implication the price charged cannot be considered as Cum-duty price as held in Amit Agro Industries Ltd. 2007 (210) ELT 183 (SC) wherein the Hon'ble Supreme Court observed as under : In our view, the above judgments in the case of Maruti Udyog Ltd. and Srichakra Tyres Ltd. have no application in the facts of the present case. In the case of Asstt. Collector of Central Excise vs. Bata India Ltd. Reported in 1996 (84) E.L.T. 164 this Court held that under section 4 (4) (d) (ii) of Central Excises and Salt Act, 1994 the normal wholesale price is the cum duty price which the whole-seller has to pay to the manufacturer assessee. The cost of production, estimated profit and taxes on manufacture and sale of goods are usually included in the wholesale price. Because the wholesale price is usually the cum duty price, the above section 4 (4) (d) (ii) lays down that the value will not include duty of excise, sales tax and other taxes, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings is twofold. First, the factual position narrated therein regarding clandestine removal was never put to the Petitioner in the Show Cause Notice, and it could not have been held against the Petitioner. Second, even assuming there was a removal to DTA without permission, the Cum Duty benefit cannot be denied. The learned Counsel for the Petitioner submitted that the reasoning of the Settlement Commission in the impugned order is contrary to the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise, Delhi v/s. Maruti Udyog Ltd. (2002) 141 ELT 3 SC and the decision in the case of Sarla Performance Fibers Ltd. v/s. Commissioner of Central Excise, Surat-II (2016) 336 ELT 577 SC. The learned Counsel for the Petitioner submitted that the sale price of a 100% EOU into the domestic tariff area would have to be considered as inclusive of duty payable, that is cum duty price, and therefore, there is no relevance to the aspect of clandestine removal as erroneously relied upon by the Settlement Commission. 8. The learned Counsel for the Respondents, on the other hand, submitted that the Petitioner was put to notice about the case against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the machinery and M/s. Speciality was not complete, and M/s. Speciality did not have storing arrangement for methanol, nor it had any manufacturing premises prior to May 2003. M/s. Specialty had no supervisors, workers or staff during the concerned period; however, the office staff of the Petitioner used to be present. The goods were manufactured with the Petitioner, and the sales bills of M/s. Speciality was in effect in respect of goods not manufactured. 11. The Show Cause Notice was issued to the Petitioner on 20 June 2005 and also to Mr. Pendse. Neither the Petitioner nor Mr. Pendse responded to the Show Cause Notice and remained present. Again notice was given, and the hearing was fixed on 4 October 2005 and 7 October 2005, yet the Petitioner failed to remain present. Again hearing was fixed on 19 October 2005/24 October 2005, and the Petitioner was asked to remain present; neither the Petitioner remained present nor filed any reply. The Commissioner, Central Excise, went through the record and the statements of the witnesses and found that vital documentary evidence was done fraudulently to make it appear that the goods were cleared from the premises of M/s. Speciality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner had to show that the price of the goods includes excise duty payable by it, and there is no question of exclusion of duty element from the price determination of the value. The observations of the Hon ble Supreme Court in the case of Amit Agro, observed in paragraph 14, are reproduced in the order of the Commission, which is extracted above. In the present case, since the Tribunal has opined that in the light of the transaction of the Petitioner, there is no evidence based on which it could be held that the price realized was inclusive of duty, and therefore, the benefit of cum duty could not be granted. 14. Considering the limited scope of challenge against the order of the Settlement Commission, the Petitioner had to show that the impugned order was in breach of a settled position of law which covered the facts of the Petitioner's case. The order of the Settlement Commission cannot be assailed as if it is an order passed under an ordinary adversarial adjudication or as if the appellate power is being exercised. There are two facets in the Petitioner s case. First, the Petitioner cleared the goods from a 100% EOU without permission in the Domestic Tariff Area and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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