TaxTMI 
TaxTMI 
2017 (12) TMI 452
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....ications by passing an order under subsection 5 of section 32-F. The applications have been rejected on the ground that they are hit by section 32-O of the Central Excise Act. The Settlement Commission relied upon the order dated 31st October 2014 by which penalty of Rs. 1,50,000/was imposed on the petitioner. On that ground, a disqualification under section 32-O of the Central Excise Act was invoked and it was held that the applications were not maintainable. 2 The learned counsel for the petitioner has taken us through the impugned order. He submitted that the Settlement Commissioner could not have relied upon the order dated 31st October 2014 as the said order was passed on the application made by a branch of the petitioner at Coimbatore which was having a separate registration for service tax. He also pointed out that 13 branches of the petitioner which made the applications on which impugned order has been passed have different and separate registrations for service tax. He submitted that the said branches are separate assessees and in the present case, penalty was admittedly not imposed on any of the 13 branches which were having separate registrations which applied under se....
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....ise Act. He invited our attention to the decision of a Division Bench of this Court in the case of Poona Tools Pvt. Ltd Vs. Union of India 2015 (323) ELT 572 (Bom.). He submitted that as held in the said decision, the applications could not have been thrown out on the ground of the bar created by section 32-O as the stage of subsection 1 of section 32-F of the Central Excise Act was already over and the issue of maintainability had already been decided. He invited our attention to paragraphs 9 and 10 of the said decision. Relying upon the decision of the Allahabad High Court in the case of Commissioner of Central Excise Vs. Sun India Pharmacy Pvt. Ltd. 2016 (340) E.L.T. 464 (All.), he submitted that subsection 1 of section 32-O could be invoked only if the Settlement Commissioner has earlier imposed penalty on the assessee on the ground of concealment of particulars of duty liability. He would therefore submit that the view taken by the Settlement Commission is erroneous. 3 The learned counsel for the respondent while supporting impugned Judgment and Order relied upon the decision of a Division Bench of Calcutta High Court in the case of C.P.ReRollers Ltd. vs. Union Of India 2016 ....
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.... Provided that where the Commissioner does not furnish the report within the aforesaid period of thirty days, the Settlement Commission shall proceed further in the matter without the report of the Commissioner. (4)Where a report of the Commissioner called for under sub-section (3) has been furnished within the period specified in that sub-section, the Settlement Commission may, after examination of such report, if it is of the opinion that any further enquiry or investigation in the matter is necessary, direct, for reasons to be recorded in writing, the Commissioner (Investigation) within fifteen days of the receipt of the report, to make or cause to be made such further enquiry or investigation and furnish a report within a period of ninety days of the receipt of the communication from the Settlement Commission, on the matters covered by the application and any other matter relating to the case : Provided that where the Commissioner (Investigation) does not furnish the report within the aforesaid period, the Settlement Commission shall proceed to pass an order under sub-section (5) without such report. (5)After examination of the records and the report of the Commissi....
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....ober 2014, there was no penalty specifically imposed under section 78 of the Finance Act,1994. The said order imposing penalty of Rs. 1,50,000/was passed on the basis of the applications made before the Settlement Commissioner by the Coimbatore Branch of the petitionercompany. We have perused the show cause notice on the basis of which the applications were made. In clause 14 of the show cause notice, it was stated thus: "14. PENAL PROVISION : It appears that for the contraventions discussed above, CCIL have rendered themselves liable for penalty under Section 76 and 78 of Finance Act,1994 and liable to penalty for failure to maintain proper records, failure to pay Service Tax within the prescribed time limit and failure to file the prescribed returns in time under section 77 of Finance Act,1994." 8 Thus, the petitioner was put to notice that penalty will be imposed under sections 76, 78 and 77 of the Finance Act,1994. Ultimately, penalty has been imposed of Rs. 1,50,000/which has not been admittedly challenged by the petitioner. Paragraph 6.4 of the order dated 31st October 2014 reads thus: "PENALTY 6.4 The applicant admitted the nonpayment of Service Tax, on Club or A....
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.... 32-E provides for an assessee making an application for settlement of the cases. Under section 32-O, while creating bar on subsequent application, the legislature has used the words "imposition of a penalty on the person who made application under section 32A for settlement". In the present case, the person is the petitioner which is a limited company. Each branch of the petitionercompany had different registrations under the service tax. The Commission has made an in depth consideration of the issue and there is a detailed discussion on this aspect. The Tribunal referred to the definition of "person" under the Finance Act,1994 and came to the conclusion that the petitionercompany is a person. As stated earlier, the legislature has not used the word "assessee" in section 32-O. The embargo is on the "person" as distinguished from an "assessee". 13 Reliance was placed by the learned counsel for the petitioner on the circular dated 8th August 2013 issued by the Central Board of Excise and Customs, New Delhi. He relied upon the second clarification issued under the said circular. The relevant part of the circular reads thus: "Government of India Ministry of Finance (Department of....
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....on or audit is pending as on the 1st day of March 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration." 15 Apart from the fact that section 32-E and the said Scheme operate in different fields, the opening portion of clause 106 of the Scheme shows that emphasis is on "person" and not on an "assessee" declaring his tax dues. Therefore, argument that the clarification issued under the circular dated 8th August 2013 clarifies not only the said Scheme but also the liability in general under the service tax cannot be accepted. The clarification issued is confined only to applicability of the said Scheme. 16 We have already quoted subsection 1 of section 32-F. The said provision enables the Settlement Commission to reject the application for settlement at the initial stage. There is an option available for the Settlement Commission either to reject the application or to proceed with the application. If subsection 5 of Section 32-F is considered, it is apparent that even after crossing the stage of subsection 1 of section 32-F, the Settlement Commission is empowered to reject the application. In fact, subsection 5 ....