TaxTMI 
TaxTMI 
2016 (4) TMI 1067
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Section 32E of the Central Excise Act, 1944 with regard to the fifth show-cause notice. It appears that the Settlement Commission in its order dated 28th March, 2014 has not made a correct interpretation of Section 32-O(I) of the Central Excise Act, which is reproduced below: "32-O....[Where, .....]]- (i) an order of settlement passed under sub-section (7) of section 32F [, as it stood immediately before the commencement of section 122 of the Finance Act, 2007 (22 of 2007) or sub-section (5) of section 32F,] provides for the imposition of a penalty on the person who made the application under section 32E for settlement, on the ground of concealment of particulars of his duty liability; .......... then, he shall not be entitled to apply for settlement under section 32E in relation to any other matter." The Commission has no doubt held in paragraph 24 of its order that a penalty of Rs. 5 lakhs was imposed on M/s. Rohit Ferro Tech Limited. But it failed to appreciate that this did not prevent Rohit Ferro Tech Limited from approaching the Settlement Commission in a second case unless the penalty was inflicted on them, on their making a Section 32E application for sett....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were again indulging in clandestine manufacture and clearance of goods, show cause notice dated 7th May, 2013 was issued. It was the fifth show cause notice. The respondent filed an application for settlement admitting removal of finished goods without payment of duty and deposited a sum of Rs. 20 lakhs in advance. According to him, as on earlier four occasions orders were passed by the Commission imposing penalty for evasion of duty, the Commission was justified in passing the order dated 28th March, 2014 on the said application for settlement holding it had no jurisdiction to entertain the application under section 32-O(1)(i) of the Act which the learned Single Judge in the impugned judgment had overlooked. Moreover in the writ petition the vires of section 32-O was not under challenge. Had the respondents been aggrieved with the fifth show cause notice, instead of filing applications for settlement, they should opted for adjudication under the Act. Mr. Sudhir Kumar Mehta, learned advocate for the respondents, that is the writ petitioners, submitted that as revenue laws have to be construed strictly and since the Commission in its order dated 28th March, 2014 did not specificall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riate to refer to section 32-O(1)(i) and sub-section 2 of section 32 which are as under:- "32-O. Bar on subsequent application for settlement in certain cases.- [(1)] [Where, [***]]- (i) an order of settlement passed under sub-section (7) of section 32F [, as it stood immediately before the commencement of section 122 of the Finance Act, 2007 (22 of 2007) or sub-section (5) of section 32F,] provides for the imposition of a penalty on the person who made the application under section 32E for settlement, on the ground of concealment of particulars of his duty liability; or [Explanation.- In this clause, the concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer.] then, he shall not be entitled to apply for settlement under section 32E in relation to any other matter. Sub-section 2 to section 32-O, inserted with effect from 1st June, 2007 and omitted with effect 8th May, 2010 was as under:- "(2) Where an assessee has made an application under sub-section(1) of section 32E, on or after the 1st day of June, 2007 and if such application has been allowed to be proceeded with under sub-section (1) of section 32F, such as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2013 which involves evasion of Rs. 19,80,703/- as Central Excise Duty. 25. In all the earlier orders passed by this bench in respect of the applicant, nowhere the applicability fo the provisions of section 32-O(I)(i) has been even remotely examined, even though the fact that the applicant has been penalized by Settlement Commission, earlier is clearly noted. 26.................. 27.................. 28. Four such orders have been issued by this Bench in the case of the applicant earlier. In three of these cases, penalty has been imposed on the applicant. First time, penalty was imposed on them, vide order dated 26.11.2010 and after that two more applications from them were admitted and also settled by the bench. This is in contravention of the provisions of section 32-O(1)(i) of the Central Excise Act, 1944. M/s. Rohit Ferro-Tech Ltd. stood debarred from applying to the Settlement Commission in any matter after 26.11.2010, when a penalty was imposed on them. All subsequent orders of settlement have been issued ignoring the provision of section 32-O(1)(i), which by no stretch of imagination can be treated as a precedent. "To perpetuate an error is no heroism. To rectify it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cants cannot be settled with the main applicant is not eligible to come before the Settlement Commission. In terms of Section 32O(1)(i) of the Central Excise Act, 1944, without going into the merits of the case, all the applications(main applicant as well as co-applicants) are outrightly rejected and dismissed. (Emphasis supplied) So far as the first issue is concerned, it is to be noted that Mr. Mehta learned advocate for the respondents in this appeal had submitted that as the earlier four show cause notices were issued prior to the introduction of the "Explanation" by Finance Act (N). (No.2) ACT 2014, the bar under section 32-O (1)(i) is not applicable. The argument made on behalf of the respondent that section 32-O(I)(i ) cannot be accepted, if one looks at the plain language of section 32-E(1) of the Act. The "Explanation" in section 32-O(I) (i ) stating that "the concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer" is in aid to and evidently in consonance with the opening part of the provisions contained in section 32-E(1) which provides "An assessee may, in respect of a case relating to him, make an application....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplication for settlement for hearing, no "earlier application" on the "identical" issue was "pending" before it. Hence, the section 32-O(2) since deleted, does not come to the aid of the respondents herein, that is the writ petitioners. In this context it is to be noted that a show cause notice was issued on 11th November, 2011 and the respondent had filed an application for settlement on 16th May, 2012 admitting the duty liability which was disposed of by order dated 12th October, 2012 by imposing penalty. So far as the third issue is concerned, as under section 32-O(1)(i) the bar to file subsequent application was always in vogue, in view of the clear finding in detail by the Commission that in the previous proceedings penalty was imposed for concealment of particulars of duty liability, the argument of the respondent on this issue cannot be accepted. In the instant case the learned Single Judge, in the judgement under challenge had overlooked paragraphs 24, 25, 28, 34 and 35 of the order dated 28th March, 2014 passed by the Commission dealing specifically with the earlier proceedings and the orders passed thereon, as noted hereinbefore. The said orders, under section 32M, are ....