TaxTMI 
TaxTMI 
TaxTMI 
2010 (6) TMI 195
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...., no case before the Commission exists." 2. Section 32E, to the extent relevant, is as under:- "32E. Application for settlement of cases:- (1) An assessee may, at any stage of a case relating to him make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his duty liability which has not been disclosed before the Central Excise Officer having jurisdiction, the manner in which such liability has been derived, the additional amount of excise duty accepted to be payable by him and such other particulars as may be prescribed including the particulars of such excisable goods in respect of which he admits short levy on account of misclassification or otherwise of such excisable goods, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided: Provided that no such application shall be made unless,- (a) the applicant has filed returns showing production, clearance and central excise duty paid in the prescribed manner; (b) a show cause notice for recovery of duty issued by the Central Excise Officer has been received by the applicant; and (c) t....
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....rder-in-original is passed prior to the filing of the settlement application, but it is communicated to the assessee after such filing, the Settlement Commission proceeds with applications and does not reject them outright as has been done in the present writ petitions. To establish this proposition, the learned counsel for the petitioners placed a copy of the Settlement Commission's order in the case of - In Re: Emjay Creations: (2007) 219 E.L.T 776 (Sett. Comm.). Reliance was also placed by the learned counsel for the petitioners on a decision of the High Court of Kerala in the case of Government Wood Works v. State of Kerala: (1988) 69 STC 62. 5. On the other hand, the learned counsel for the respondents submitted that the provisions of Section 32E of the said Act do not lend themselves to any ambiguity and, therefore, the same should be construed literally. In other words, according to the learned counsel, it does not matter as to whether the assessee has been communicated or has received the order-in-original prior to the making of an application under Section 32E and all that is relevant for proceeding with a settlement application is that the order-in-original must not hav....
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....original was passed on 24.12.2009 by the Commissioner of Customs and Central Excise, Ghaziabad. By virtue of the said order, the demand of central excise duty of Rs 5,78,11,047/- upon Qualimax Electronics Private Limited was confirmed under the proviso to Section 11A (1) of the said Act. Interest at the appropriate rate was also demanded on the said amount from Qualimax Electronics Private Limited under Section 11AB of the said Act. The said Commissioner also imposed a penalty of Rs 5,78,11,047/- upon Qualimax Electronics Private Limited under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the said Act. By virtue of the order dated 24.12.2009, the said Commissioner also imposed a penalty of Rs 1,00,00,000/- on Mr Pradeep Gupta, Director of Qualimax Electronics Private Limited under Rule 26 of the Central Excise Rules, 2002. A penalty of Rs 50 lacs was also imposed on Mr Mohit Gupta, who was looking after the work of Qualimax Electronics Private Limited, under the said Rule 26. A penalty of Rs 10 lacs was imposed on Mrs Manju Gupta (proprietor of M/s Vikram Tyre) under the said Rule 26. 7. According to the petitioners, they were unaware of the making/passing o....
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.... that is, within the stipulated period of seven days. By virtue of the said notice, the petitioners were also required to explain the following:- "3. The written explanation should, among other things, contain whether the applications fulfill the criteria as laid under 32E of Central Excise Act and also inform the Commission whether, the bar applicable under Section 32O of the Central Excise Act, 1944 is applicable in their case. 4. It is also required to be explained that in view of the fact that the applicant has admitted the entire duty demand however, they have deposited only an amount of Rs 5.15 crores hence, the remaining amount of Rs 63,11,047/- is not deposited by the applicant till the filing of settlement application, hence not fulfilling the requirement of Section 32E of the Central Excise Act 1944 and moreover, the settlement applications have also been filed in the old format which is discontinued and replaced by the new format since 01/03/07, why the said applications shall be allowed to be proceeded with." Immediately on receipt of the said notice under Section 32F(1), instead of replying to the same and offering the explanation sought for by the Settlement Com....
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....in-original was passed/made on 24.12.2009. There is no controversy with regard to this. There is also no controversy with regard to the fact that copies of the said order-in-original were received by the petitioners much after 08.01.2010, that is, after the date on which the settlement applications had been filed under Section 32E(1) of the said Act. 11. In the course of hearing of these writ petitions, we had directed the counsel for the respondents to verify as to on which date the order-in-original was despatched and on which date the service was effected on the petitioners. The learned counsel for the respondents placed before us a copy of the letter dated 15.02.2010 issued by the Superintendent, Central Excise, R-I D-III, Ghaziabad to the Superintendent (Adj.), Customs and Central Excise, Commissionerate, Ghaziabad. From the said letter dated 15.02.2010, it is clear that the copies of the order-in-original dated 24.12.2009 had been sent individually to noticee Nos. 2-4 (Mr Pradeep Gupta, Mrs Manju Gupta and Mr Mohit Gupta) at their address - 83, Anand Lok, New Delhi-49 through speed post on 09.02.2010. The letter also indicates that a copy of the order-in-original dated 24.1....
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....s dated 15.02.2010 and 19.05.2010, it is clear that the petitioners had not received the order-in-original dated 24.12.2009 when they filed their settlement applications under Section 32E(1) of the said Act before the Settlement Commission on 08.01.2010. In fact, even if whatever is stated in the two letters is taken to be true, the copies of the order-in-original had not even been sent by post to the petitioners by 08.01.2010. The service by pasting on the gate of the factory premises was also done only on 13.01.2010. However, it is also true that the order-in-original dated 24.12.2009 was despatched from the office of the adjudicating authority (i.e., Commissioner of Central Excise and Customs, Ghaziabad) on 31.12.2009. It is on this date that the order-in-original dated 24.12.2009 went out of the control of the adjudicating authority. This fact is of material significance and the reason for this would be clear from the discussion below. 13. With the facts out of the way, we shall now examine the precedents in law. As pointed out above, the learned counsel for the petitioners referred to a decision of the Settlement Commission in the case of Emjay Creations (supra) to submit th....
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.... passed such decision or order or issued such summons or notice. (2) Every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or a copy thereof is affixed in the manner provided in sub-section (1).' It is clear that the above provision deals with the manner in which any decision or order or summons or notice is to be served. In the first instance, the decision, order etc. is to be served by tendering the same to the person for whom it is intended or his authorized agent, if any. It may also be served by sending it through registered post with acknowledgement due to the said person or his authorized agent. If these modes of service, that is, either by tendering or by sending through registered post are not successful, then the decision, order etc. could be served by affixation as provided in clauses (b) and (c) of Section 37C(1). In the present case, we find that the order-in-original dated 24.12.2009 was admittedly not tendered to the petitioners or their agents. It is also clear that the said order-in-or....
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....urt further observed that this should be done within the prescribed period, though the actual service of the order may be beyond that period. The decision of the Court ultimately was that unless the order of the Deputy Commissioner in exercise of its power under Section 35 of the Kerala General Sales Tax Act had been issued from his office within the period of four years, it had to be held that the proceedings were barred by limitation. It observed that the said question of whether it had been issued prior to the period of limitation or not had not been considered by the Tribunal and, therefore, the matter was remanded to the Tribunal for an examination of the records to ascertain whether the order of the Deputy Commissioner had been issued from his office within the period of four years prescribed in Section 35(2) of the Kerala General Sales Tax Act. 15. The decision in Government Wood Works (supra) does not really advance the case of the petitioners. The ratio of the decision in Government Wood Works (supra) is that an order of an authority would be regarded as having been made or passed if the order is issued in the sense that it goes beyond the control of the authority concer....
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....if the owner did not accept the offer, Section 18 gave him a statutory right of having the question determined by a Court. Consequently, the acquisition proceedings would stand concluded only upon such judicial determination. 17. The Supreme Court, after noting that the Award is nothing but an offer, concluded that the normal requirement under contract law is that an offer must involve a communication of the same to the party concerned. It is in this context that the Supreme Court held that the date of the Award cannot be determined solely by reference to the time when the award is signed by the Collector or delivered by him in his office but it must involve the consideration of the question as to when it was known to the party concerned either actually or constructively. Consequently, the Supreme Court held that the literal and mechanical construction of the words 'the date of the award' occurring in Section 18 would not be appropriate. 18. The Supreme Court also examined the matter from the standpoint of the award being an administrative decision taken by the Collector. The Supreme Court observed that such a decision ultimately affects the rights of the owner of the property ....
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....posed to the earlier opinion. Therefore, to make the opinion of a Minister amount to a decision of the Government, it must be communicated to the person concerned. It is in this sense and in this context that the Supreme Court observed that communication of a decision was necessary for it to take effect. 20. In State of Punjab v. Khemi Ram (supra), the Supreme Court was required to consider the question as to whether an order of suspension passed against a government servant would take effect when it is "made" or when it is actually served on or received by the government servant. Briefly stated, the facts in that case were that a suspension order had been passed/made against a government servant. However, before the said suspension order could be served upon him, he retired from service. Thereafter, departmental proceedings continued pursuant to the suspension order and ultimately led to an order of dismissal. The question for determination was whether the order of suspension, which had admittedly been made before the date of the government servant's retirement, did not take effect by reason only that it was received by him after his retirement and which would render the ultimat....
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.... The Supreme Court also differentiated the case of suspension from that of an order of dismissal and held that in the case of an order of dismissal, actual knowledge of the government servant may perhaps become necessary because of the consequences of such a decision. 22. These decisions of the Supreme Court have been the subject matter of later decisions and we would like to allude to the same. The decisions, which we shall refer to, are:- (i) Collector of Central Excise v. M. M. Rubber Co.: (1991) 55 E.L.T. 289 (SC); (ii) D. Saibaba v. Bar Council of India and Another: (2003) 6 SCC 686; and (iii) MCD v. Qimat Rai Gupta and Others: (2007) 7 SCC 309. 23. In CCE v. M.M. Rubber and Co.: 1992 Supp (1) SCC 471, the short question of law that arose for consideration before the Supreme Court was concerning the relevant date for the purpose of calculation of the period of one year provided under Section 35E(3) of the said Act. The said provision deals with the limitation for exercise of the powers under sub-sections (1) and (2) of section 35E by the Board or the Collector of Central Excise, respectively. Section 35E(3) reads as under:- "No order shall be made under sub-section ....
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....against the same, he should be made aware of passing of such order. Therefore courts have uniformly laid down as a rule of law that for seeking the remedy the limitation starts from the date on which the order was communicated to him or the date on which it was pronounced or published under such circumstances that the parties affected by it have a reasonable opportunity of knowing of passing of the order and what it contains. The knowledge of the party affected by such a decision, either actual or constructive is thus an essential element which must be satisfied before the decision can be said to have been concluded and binding on him. Otherwise the party affected by it will have no means of obeying the order or acting in conformity with it or of appealing against it or otherwise having it set aside." The court concluded that if the intention or design of the statutory provision is to protect the interest of the person adversely affected, by providing a remedy against the order or decision, any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent au....
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....t to consider the Supreme Court decision in MCD v. Qimat Rai Gupta (supra). The meaning of the word 'made' occurring in sub-section (4) of Section 126 of the Delhi Municipal Corporation Act, 1957 was in question. Section 126 of the DMC Act empowers the Commissioner to amend the assessment list in terms of one or the other modes provided for therein. Sub-section (2) thereof provides for giving an opportunity to the assessee of being heard before an order of amendment is made. Sub-section (3) of Section 126 obligates the Commissioner to consider the objections which may be made by such persons. Clause (b) of sub-section (4) of Section 126 reads as under: "126. (4) No amendment under sub-section (1) shall be made in the assessment list in relation to- (b) the year commencing on the 1st day of April, 1988 or any other year thereafter, after the expiry of three years from the end of the year in which the notice is given under sub-section (2) or sub-section (3), as the case may be: The Supreme Court pointed out that a distinction exists in the construction of the word 'made' depending upon the question as to whether the power was required to be exercised within the prescribed period ....
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.... different to the cases where the starting point of limitation for invoking a statutory remedy is to be construed from the date of an order. Here, the circumstances seem to be quite the reverse. The adjudication order signals the end of the case pending before the adjudicating authority. It is the end point insofar as the petitioners' right to seek a settlement under section 32E is concerned. Would it really matter if the petitioners were aware that the case has been adjudicated or not on the date they made the settlement applications under Section 32E' It is not as if the passing of the order triggers the starting point of limitation for them to seek recourse to a remedy such as an appeal or review or revision. In that case, unless otherwise expressly provided by the Statute, it would be the date of receipt of the order that would be material. But, here we need to determine the date on which the petitioners' case could be said to have been adjudicated in the context of Section 32E of the said Act. The adjudication of the case by the adjudicating authority closes the window of opportunity, which the petitioners hitherto had, for seeking a settlement of the case. That opportunity wa....