2016 (10) TMI 741 - HC - Central Excise

Settlement Commission's Decision Upheld with Emphasis on Finality and Due Process

M/s. Hi-design Versus The Commissioner of Central Excise, The Customs & Central Excise Settlement Commission, The Joint Commissioner of Central Excise, The Commissioner of Central Excise,

M/s. Hi-design Versus The Commissioner of Central Excise, The Customs & Central Excise Settlement Commission, The Joint Commissioner of Central Excise, ... Issues:Challenge to order passed by Customs and Central Excise Settlement Commission.Analysis:The petitioners challenged the order passed by the Customs and Central Excise Settlement Commission, Additional Bench, Chennai, regarding the settlement of their case arising from a show cause notice issued to them. The petitioners, who are manufacturers of leather goods, were accused of manufacturing and removing goods without payment of duty, availing SSI exemption, and manipulating records. The show cause notice demanded duty payment of Rs. 5,16,08,561. The petitioners admitted additional duty of Rs. 1,42,95,172 in their application before the Settlement Commission, along with seeking immunities.During the proceedings, the petitioners' counsel argued that one of the units did not have the resources to function independently for availing SSI exemption, and thus, its clearances should be clubbed with the petitioner. The Revenue opposed the admission of the application, claiming that most activities were carried out by the petitioners and that there was no true and full disclosure. The Settlement Commission settled the case after considering all aspects.The petitioners contended that the Settlement Commission did not render any finding accepting their argument that their activities did not amount to manufacture. The Revenue maintained its stance that the petitioners were not entitled to any indulgence. The Settlement Commission directed the petitioners to pay the entire Central Excise duty, imposed a penalty, and granted immunities from prosecution.The High Court cited various legal precedents, emphasizing that the Settlement Commission's order is final and conclusive, and interference is only allowed if the order is contrary to statutory provisions. The Court rejected the petitioners' attempt to dissect the Settlement Commission's order to accept favorable aspects while rejecting others. Ultimately, the Court dismissed the writ petitions challenging the Settlement Commission's order and directed the petitioners to file their reply to the show cause notices and participate in the adjudication proceedings.In conclusion, the High Court upheld the Settlement Commission's order, emphasizing that the petitioners failed to establish grounds for interference. The legal precedents cited reinforced the finality of the Settlement Commission's order and the limited scope for challenging it based on statutory provisions. The Court's decision to dismiss the writ petitions and direct the petitioners to engage in the adjudication proceedings signifies the adherence to legal principles and due process in resolving the dispute.