Settlement Commission's Jurisdiction Upheld, Tribunal to Reconsider

The High Court held that the Settlement Commission had jurisdiction to declare the Commissioner's order as non est. The Tribunal should have rejected the Revenue's appeals as not maintainable. The High Court allowed the appeals, set aside the CESTAT's orders, and directed a fresh consideration by the adjudicating authority without influence from previous orders.

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Issues Involved:
1. Validity of the adjudication order passed by the Commissioner after the application for settlement was filed.
2. Authority of the Committee of Chief Commissioners to review an adjudication order declared non est by the Settlement Commission.
3. Maintainability of the appeal filed by the Revenue against the Commissioner's order before the Tribunal.
4. Jurisdiction of the Settlement Commission to declare the Commissioner's order as non est.

Detailed Analysis:

1. Validity of the Adjudication Order Passed by the Commissioner:
The appellants contended that the Commissioner should have deferred adjudication of the matter once the application for settlement was filed with the Settlement Commission. The Settlement Commission had declared the Commissioner's order dated 30-07-2004 as non est in law. The Tribunal, however, held that the Settlement Commission did not have the power to invalidate the adjudication order and that the appellate jurisdiction of the Tribunal could not be taken away by the Settlement Commission's observation.

2. Authority of the Committee of Chief Commissioners:
The appellants argued that once the Settlement Commission declared the Commissioner's order as non est, the Committee of Chief Commissioners could not review it. The Tribunal, however, maintained that the Committee of Chief Commissioners is a statutory body created for the specific purpose of deciding whether appeals should be filed, and therefore, the appeals filed by the Revenue were maintainable.

3. Maintainability of the Appeal Filed by the Revenue:
The appellants contended that the appeals by the Revenue were not maintainable as the order impugned was declared non est by the Settlement Commission. The Tribunal, however, held that the Settlement Commission's declaration did not affect the appellate jurisdiction of the Tribunal and that the appeals filed by the Revenue were maintainable.

4. Jurisdiction of the Settlement Commission:
The appellants argued that the Settlement Commission had the exclusive jurisdiction to exercise the powers of any Central Excise Officer once an application for settlement was admitted. The Tribunal disagreed, stating that the Settlement Commission did not have the power to declare the Commissioner's order as non est. However, the High Court held that the Settlement Commission was entitled to pass final orders on 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 the Commissioner (Investigation).

Conclusion:
The High Court concluded that the Settlement Commission had the jurisdiction to declare the Commissioner's order as non est and that the Tribunal should have rejected the appeals filed by the Revenue as not maintainable. The High Court allowed the appeals, set aside the impugned orders of the CESTAT, and directed the adjudicating authority to consider the matter afresh without being influenced by the previous orders.

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