TaxTMI 
TaxTMI 
2019 (1) TMI 774
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 32-F(5) of the Central Excise Act, 1944 ('Act' for short). 2. The facts in the three writ petitions are different and have been independently noticed and dealt with below. The reason we are disposing of these writ petitions by a common order and judgement is the commonality and similarity in the legal issues involved. 3. Primary common legal issue raised is; whether the Settlement Commission can after holding that the applicant has failed to make full and disclosure of his duty liability and the manner in which such liability was derived, act as an adjudicating authority to decide the show cause notice issued by the Central excise Officer and determine the demand raised? 4. The prayer of the writ petitioners in the W.P (C) No. 10013/2016, K.M.G. Rolling Private Limited and Another versus Commissioner (Investigation) Customs, Central Excise and Service Tax and Another and the W.P (C) No. 8939/2015, Iceberg Aqua Private Limited and Others versus Union of India and Others, is that the order of the Settlement Commission should be set aside and quashed and the matter may be remitted to the adjudicating authority to pass an appropriate order in accordance with law. The prayer m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mportant pre-requisite for a valid application under Section 245-C(1) of the Income Tax Act. Therefore, unless the Settlement Commission records its satisfaction on the jurisdictional pre-conditions, they would not have jurisdiction to pass an order recording settlement. In the context of the Income Tax Act, it was held that the question of 'full and true' disclosure and the manner in which the undisclosed income was derived, can be examined at three different stages, namely, sub-Section (1), sub-Section (3) and sub-Section (4) of Section 245-D of the Income Tax Act. Applicant assessee cannot be permitted to make multiple disclosures or take benefit of the provisions for settlement if he has failed to comply with the full statutory mandate. Even if the Settlement Commission decides to proceed with the application, it is not denuded of the power to examine the said question at the subsequent stage under sub-Section (3) and sub-Section (4) of Section 245D of the Income Tax Act. In the case of Ajmera Housing Corporation (supra), it was observed:- "35. It is plain from the language of sub-section (4) of Section 245-D of the Act that the jurisdiction of the Settlement Commission to p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... disclosed in the application filed under the said section in the prescribed form." 7. The Gujarat High Court has examined and dealt with the requirement of 'full and true' disclosure and manner in which the undisclosed income was derived, in Vishnubhai Mafatlal Patel versus Assistant Commissioner of Income Tax, Special Civil Application Nos. 12060, 12061, 12063 of 2012 decided on 4thDecember, 2012. Relevant paragraph of the said judgement reads:- "12. The twin requirements for an assessee making an application for settlement under section 245C(1) of the Act, of containing full and true disclosure of income which has not been disclosed before the Assessing Officer and the manner in which such income has been derived, are thus of considerable importance and would be open for the Settlement Commission to examine the fulfilment thereof at several stages of the settlement proceedings. If therefore, while at the threshold, considering the question whether such application should be allowed to be proceeded with or be rejected, the Commission examined such questions on the basis of disclosure made by the applicants and the supporting material produced along with the applications, we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the Central Excise Officer has been received by the applicant; (c) the additional amount of duty accepted by the applicant in his application exceeds three lakh rupees; and (d) the applicant has paid the additional amount of excise duty accepted by him along with interest due under section 11AA : Provided further that the Settlement Commission, if it is satisfied that the circumstances exist for not filing the returns referred to in clause (a) of the 1st proviso to sub-section (1), may after recording the reasons thereof, allow the applicant to make such application: Provided also that no application shall be entertained by the Settlement Commission under this subsection in cases which are pending with the Appellate Tribunal or any court: Provided also that no application under this subsection shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986). [(1A)****] [(2)****] (3) Every application made under sub-section (1) shall be accompanied by such fees as may be prescribed. (4) An application made under sub-section (1) shall not be allowed to be w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inety 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 Principal Commissioner of Central Excise or the Commissioner of Central Excise received under subsection (3), and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under sub-section (4), and after giving an opportunity to the applicant and to the Principal Commissioner of Central Excise or Commissioner of Central Excise having jurisdiction to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not cove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmission that it has been obtained by fraud or misrepresentation of facts : Provided that the amount of settlement ordered by the Settlement Commission shall not be less than the duty liability admitted by the applicant under section 32E. (9) Where any duty, interest, fine and penalty payable in pursuance of an order under sub-section (5) is not paid by the assessee within thirty days of receipt of a copy of the order by him, the amount which remains unpaid, shall be recovered along with interest due thereon, as the sums due to the Central Government by the Central Excise Officer having jurisdiction over the assessee in accordance with the provisions of section 11. (10) Where a settlement becomes void as provided under sub-section (8), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Central Excise Officer having jurisdiction may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the date of the receipt of communic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion (5) of section 32F within the time specified in such order] or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted. (3) An immunity granted to a person under subsection (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particular material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted. Section 32L. Power of Settlement Commission to send a case back to the Central Excise Officer. -(1) The Settlement Commission may, if it is of opinion that any person who made an application for settlement under section 32E has not co-operated with the Settlement Commission in the proceedings before it, s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lause, the concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer. (ii) after the passing of an order of settlement [xxxx] in relation to a case, such person is convicted of any offence under this Act in relation to that case; or (iii) the case of such person is sent back to the Central Excise Officer having jurisdiction by the Settlement Commission under section 32L, then, he shall not be entitled to apply for settlement under section 32E in relation to any other matter. (2) Omitted" Sub-Section (1) to Section 32-E of the Act states that an assessee may in respect of a case related to him make an application 'before adjudication' to the Settlement Commission to have the case 'settled'. Sub-Section (1) uses the expression 'adjudication' with reference to proceedings pending before the Central Excise Officer on issue of show cause notice for recovery and 'settled' with reference to the application made by an assessee before the Settlement Commission. The settlement application, the provision postulates, must be filed in the form prescribed and contain a 'full and true' disclosure of the duty liability not hithert....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee/applicant is barred and cannot again approach the Settlement Commission in another case. 10. Section 32-F deals with the procedure on filing of the application under Section 32-E and prescribes a strict time line of seven days for issue notice to the applicant from the date of the receipt of the application to explain why the application should be allowed to be proceeded with. The Settlement Commission is thereafter required to pass an order within fourteen days from the date of notice, allowing the application to be proceeded with or rejecting the application. On rejection, the proceedings before the Settlement Commission abate. Rejection order can be passed after notice and taking into consideration the explanation provided by the applicant. Proviso to this sub-section states that where no notice has been issued or no order has been passed within the time stipulated, the application shall be deemed to have been allowed. Every order under Sub-Section (1) of Section 32-F of the Act is required to be communicated to the Principal Commissioner of Central Excise or Commissioner of Central Excise having jurisdiction. Where an application is allowed or deemed to have be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ral Excise having jurisdiction of being heard and after examining such further evidence as may be placed before it or obtained by it may, in accordance with the provisions of this Act, pass such order as it thinks fit on the 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 Principal Commissioner or Commissioner of Central Excise and Commissioner(Investigation). Sub-Section (6) to Section 32-F requires the Settlement Commission to pass an order under Sub-Section (5) in respect of the application within nine months from the last date of the month in which the application was made, failing which the settlement proceedings would abate and the adjudicating authority before whom the proceedings, at the time making of the application were pending, is required to dispose of the case in accordance with the provisions of the Act as if no settlement application under Section 32-E was filed. Proviso states that the period can be extended by the Settlement Commission for a further period not exceeding three months. 11. Sub-section (7) clarifies that the materials brought on record before the Settl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditions are satisfied that an order 'settling' the case can be passed. In-eligible cases, where jurisdictional pre-conditions are not satisfied, must be returned to the board of the Central Excise Officer for adjudication of the show cause notice on merits. An order under Sub-Section (5) to section 32-F can enhance the duty liability as declared in the application but only when condition of 'full and true' disclosure of undisclosed duty liability and the manner in which the liability was derived are satisfied. Satisfaction of the jurisdictional pre-conditions cannot be waived by the Settlement Commission. The Act has not been conferred on the Settlement Commission the power to adjudicate and to pass an order-in -original as a Central Excise Officer in the form of a settlement order. Settlement Commission is not an adjudicating authority or an incognito Central Excise Officer. Settlement Commission does not pass an order on merits deciding duty as demanded in the show cause notice. 13. We are conscious that the provisions for settlement can be misused to delay adjudication proceedings before the Central Excise Officer, and by accepting the legal position as canvassed by the petit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s for invoking jurisdiction of the Settlement Commission. 15. On the said legal position, i.e. on scope and ambit of settlement order, we would now refer to the decision of this Court in W.P.(C) No.1495/2007, Picasso Overseas and Ors. versus The Director General of Revenue Intelligence and Anr., decided on 3rd August, 2009, wherein it has been held:- "4. The Senior counsel for the petitioners has contended before us that the Settlement Commission cannot make adjudication of highly contested and disputed question of facts. He has argued that the basic purpose of the Settlement Commission is to settle the matter and not to decide the questions of fact on which there is a wide variance between the parties. For this purpose, the Senior Counsel has relied upon the scheme of Chapter XV A of the Customs Act which contains the provisions form Section 127A to 127N. The Senior Counsel has more particularly drawn our attention to various sub sections of Section 127B and 127C and finally laid emphasis on Section 127I to contend that in a case of not arriving at a settlement, the Settlement Commission was bound to refer the matter back for adjudication to the concerned officer of customs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... there are terms of settlement which are agreed to by an applicant and a liability of duty which is accepted by him. Thus, it cannot be said that when an applicant comes for settlement he can be fastened with a liability which he never intended as accepted to be payable by him. We may further hold from subsection (1) of Section 127 C which uses the expression "complexity of the investigation" meaning thereby a Settlement Commission would not in cases of complexity of the investigation have jurisdiction to decided and admit such an application. Therefore, when there are highly complex and contentious questions of fact, a Settlement Commission would not ordinarily even admit the application in as much as the scope and object of scheme of Sections of Chapter XVA is settlement and not adjudication of highly complex questions of facts. Section 127 I also throws further light by entitling Settlement Commission to refer the case back to the proper officer who shall dispose of the case in accordance with the provisions of the Act as if no application for settlement has been made under Section 127B." The aforesaid decision interprets parimateria and similar provisions of Section 127F of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aterial as the Settlement Commission would examine complex and difficult factual and legal issues, does not mitigate and omit the requirement and condition of 'full and true' disclosure of the undisclosed tax liability. This requirement remains in the statute as an essential jurisdictional pre-condition to be satisfied for any order under Sub-Section (5) to section 35-F of the Act. 16. We would now reproduce paragraph 12 of the decision in Picasso Overseas & Ors.(supra), which reads as under:- "12. In fact, we feel that in a case where at an admission stage under Section 127 (C) (1) the case throws a high degree of variation between the facts and contentions of both the parties before the Settlement Commission, then in such a case the Settlement Commission should not even admit an application because it is clear that the Department of customs does not accept the duty which an applicant feels is payable by him and therefore is bound to enquire into highly disputed question of facts. Of course, we may hasten to add in certain cases in spite of a huge variation and dispute which may be sought to be raised by the Department, it can be found that the disputes raised by the Departm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 32-E. Further, as per sub-Section (2) immunity granted under sub-section (1) can be withdrawn if the person fails to pay the sum specified in the order of the settlement passed under sub-section (5) to Section 32-F. Immunity can also be withdrawn if the Settlement Commission is satisfied that such person had in the course of the settlement proceedings concealed any particular material or had given false evidence and thereupon, the person may be tried for the offence in respect of which immunity was granted or for any other offence of which he appears to have been guilty. 20. Section 32-L states that if the Settlement Commission is of the opinion that if the applicant has not cooperated with the Settlement Commission in the proceedings before it, the case may be sent back to the Central Excise Officer having jurisdiction who shall thereupon dispose of the case in accordance with the provisions of the Act as if no application for settlement had been made. Thus, the provision states that the Settlement Commission has the power and authority to remit the case to the Central Excise Officer when the applicant has not cooperated. Sub-section (2) to Section 32-L is equally import....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owers to "pass such order as it thinks fit on the matters covered by the application...........". It is, therefore, observed that the scheme of settlement as contained in Chapter-V of the Excise Act is distinct from the adjudication undertaken by a Central Excise Officer under the other Chapters of the Excise Act. Therefore, once the Petitioner has adopted the course of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit under the proviso to Section 11AC of the said act which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement undertaken under the provisions of Chapter-v of the Excise Act." This decision had also referred to the decision in the case of Picasso Overseas & Ors.(supra). 22. In W.P. (C) No. 6569/2017, Shree Flavours LLP versus Government of India &Ors., decided on 1st September, 2017, a decision relating to the Act, it has been held that the power of settlement requires an element of cooperation by the parties i.e. the assessee, which is a pre-requisite and an essential condition. Therefore, the reference to the term "not coo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... clause (c) requires that the applicant must deposit the duty he accepts to be the liability, along with interest. This means that it is not necessary for the show cause notice to propose a liability amount for it to be "due" under clause (c). This would include cases where a duty demand exists in the show-cause notice, but is not exhausted by this limited circumstance alone. In cases where the show-cause notice does not contain a figure, the applicant must use a best-judgment standard to determine the amount, and at the very least, deposit that amount. The use of the words "accepted by him" clearly include such a situation, and support the use of a self assessment to require the applicant to deposit what he or she thinks is the duty payable, since that in any case, is due in law, and cannot be waived by the Settlement Commission. Indeed, the Court notices that the self-assessment standard is also prescribed in Section 28(b), as an alternative to the duty ascertained by the Revenue. XXXXX 20. There is one more reason as to why we think that the petitioner's contention is untenable. The opportunity to approach the Settlement Commission is a sort of concession given by the gove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tional pre-conditions and in some cases 'settle' the matter as the applicant/assessee has satisfied the jurisdictional preconditions, albeit the additional and secondary aspects must be those that are required to be examined and decided to settle the case. Settlement Commission has the power to relegate the applicant to the proceedings before the Central Excise Officer. The provisions would also indicate that the duties of the Settlement Commission are not synonymous and an order passed by the Settlement Commission is not an adjudication order. The applicant, to invoke the jurisdiction of the Settlement Commission and to get favourable order under sub-Section(5) to Section 32-E, must meet the statutory mandate and pre-condition of 'full and true' disclosure of his duty liability and the manner in which such liability has been derived. The aforesaid pre-conditions must be satisfied before an order under sub-section (5) to Section 32-F of the Act is passed. If the said preconditions are not satisfied, the Settlement Commission should relegate the applicant to the regular and normal proceedings before the Central Excise Officer as delineated under Section 32-L of the Act. 24. Clearly,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with powers and procedure of Settlement Commission provides that in addition to the powers conferred on the Settlement Commission under Chapter XIX-A, it has all the powers which are vested in the incometax authority under the Act. Sub-section (2) is of vital importance and provides that where an application made under Section 245C has been allowed to be proceeded with under Section 245D, the Commission shall until an order is passed under sub-section (4) of Section 245D, subject to the provisions of sub-section (3) of that section have exclusive jurisdiction to exercise the powers and perform the functions of the income-tax authority under the Act in relation to the case. In essence, the Commission assumes jurisdiction to deal with the matter after it decides to proceed with the application and continues to have the jurisdiction till it makes an order under Section 245D. Section 245D(4) is the charging section and sub-section (6) prescribes the modalities to be adopted to give effect to the order. It has to be noted that the language used in Section 245D is "order" and not "assessment". The order is not described as the original assessment or regular assessment or reassessment. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted the allegation submitting that the petitioner had not made 'full and true' disclosure of the duty liability evaded by making wrong and fraudulent claim for CENVAT credit. Reliance was placed on the diary found and seized from Pawan Goyal, which as per the Revenue mentions/records a number of transactions which were quantified as Rs. 5,23,80,000/-. This amount as per Pawan Goyal, who had filed a separate application for settlement which was also disposed of by the impugned order, was the total of the cheques issued by the petitioner company in respect of the invoices against which the goods were not supplied. Pawan Goyal has not challenged the order passed by the Settlement Commission. 34. The Settlement Commission observed that the question really was of quantification of the duty for the petitioner and the other coapplicants had admitted that the goods were not supplied and the money had flown back to the petitioner, who had made some payment under the table. Reference was made to kaccha documents and the statements of Ashok Rawat and P.L. Gupta, who had affirmed the said flow back of cash and had also admitted that the documents seized relate to a short period, for the ear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TA)/ MTC (SDL)" for the total period are for Rs. 5,23,80,000/-, and therefore the demand cannot be beyond -this amount. As explained above, the written record of flowback which was in the kuccha diaries is for transactions other than those found in the diaries of Pawan Goel. Those for the earlier period were destroyed. Hence secondary evidence is resorted to as long as it clearly establishes non receipt of goods on the basis of the applicant's internal records. As the fact of flowback is admitted, and once it is admitted that there is no one to one correlation between the amounts received and the invoices, it is for the applicants to connect the payments with the invoices concerned, if they contest the conclusion of the Revenue. Given the facts of the case and the manner of recording details of flowback in the diaries, it is not for the Revenue to establish this correlation. It is also stated that the name of MTC is not mentioned in any diary entries, nor is there any evidence that MTC has also supplied invoices without goods. The applicant claims that the revenue is presuming those receipts shown without the name of any company relating to MTC. As can be seen from the above exposi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cant no. 8; M/s. Asian Colour Coated Ispat, co-applicant no. 11 and M/s. J.V. Strips Pvt. Ltd., co-applicant no. 13 were all involved in assisting the applicant in availing of wrongful Cenvat credit as they issued invoices without goods and returned cash to the applicant. They were well aware that these activities were illegal. They have also, therefore, rendered themselves liable to penal action under Rule 26(2) and Rule 27 of the Central Excise Rules, 2002. Shri Gaurav Aggarwal, Managing Director of M/s. Allied Strips, co-applicant no. 3; Shri Ravinder Gupta, Sr. Vice-President of M/s. Asian Strips, co-applicant no. 4; Shri Vikas Aggarwal, Director of M/s. AGR Steel Strips, co-applicant no. 9; Shri SVS Bhatti, Vice-President of M/s. AGR Steel Strips, co-applicant no. 10; Shri Pradeep Aggarwal, Director of M/s. Asian Colour Coated Ispat, coapplicant no. 12; Shri Jai BhagwanBindal, Managing Director of M/s. JV Strips, co-applicant no. 14 and Shri Ramesh Bhatti, CEO of M/s. JV Strips, co-applicant no. 15 were responsible for the day-to-day business of their companies and were concerned and aware of the issue of invoices without goods. They had directed their juniors to make huge cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upta, coapplicant no. 6 is also imposed a penalty of Rs. 1,00,000/- (Rupees one lakh only) under the provisions invoked in the SCN. Shri Pawan Goel, co-applicant no. 5 is imposed a penalty of Rs. 50,000/- (Rupees fifty thousand only). Shri Ashok Rawat, co-applicant no. 7 is totally exempted from penalty. The Companies M/s. Allied Strips Ltd. Co-applicant no.2; MIs. AGR Steel Strips (P) Ltd., co-applicant no. 8; M/s. Asian Colour Coated Ispat, co-applicant no. 11 and MIs. J.V. Strips Pvt. Ltd., co-applicant no. 13 are all imposed a penalty of Rs. 1,00,000/- (Rupees one 1akh only,) each. Co-applicant nos.3, 4, 9, 10, 12, 14 and 15 are imposed a penalty of Rs. 25,000/- (Rupees twenty five thousand only) each under the provisions invoked in the SCN and exempted them from penalty in excess of that amount. Prosecution: Subject to payment of above fine and penalty, the Bench grants immunity to the applicants from prosecution under the Act and Rules framed there under in so far as this case is concerned." WP(C) No.8939/2015 35. The petitioner, through its Managing Director, had filed an application for settlement in June, 2014, after they were served with a show cause notice dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty has not been deposited by the manufacturer of PDW. Enclosed herewith and marked Annexure 'H' is a chart showing the details of the cenvat credit which would have been availed by IFL and all other bottlers to whom show cause notices have been issued along with details of pet performs consumed by each bottlers as per the show cause notices issued to them." 37. The petitioner had referred to deposit of Rs. 50,00,000/- made by them during investigation, a fact admitted in the show cause notice. The petitioner having disclosed duty liability of Rs. 3,04,001.39/- as per settlement application were entitled to refund of Rs. 46,16,958.25/- out of this deposit of Rs. 50,00,000/-. Admission of undisclosed duty liability of Rs. 3,04,001.39/- is also significant. Clause (c) to the proviso to Section 32-E(1) of the Act states that the application shall not be entertained unless additional amount of duty accepted by the applicant exceeds Rs. 3,00,000/-. 38. The Settlement Commission, by the impugned order dated 18.3.2015, has held as under: "9. The Bench has carefully considered the records and the submissions made by the Ld Advocate of the applicant and Revenue at the time of hearin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ns. 9.3 The Bench finds force in the contention of the Revenue. The evidence gathered by the Revenue and detailed in the SCN and the modus operandi reflected from the evidence has not been controverted by the applicant or by other manufacturers and bottlers involved. The case is one of clandestine removal on a large scale involving several manufacturers and bottlers across the country. From the evidence adduced by the Revenue, from the detailed private records resumed from the various dramatis personae, it is clear, that from the procurement of pet resin by the applicant to the clearance of PDW by the manufacturers and bottlers, there has been a consistent effort to evade payment of duty and to deprive the government of legitimate dues. It can with good justification be called a detailed and deliberate conspiracy to evade central excise duty. But for detection by the Revenue, this evasion would have continued. 9.4 The objective of the Cenvat Credit scheme is to avoid cascading effect of duty. The scheme enables the receiver of duty paying goods to avail credit in terms of the procedure laid down in Cenvat Credit Rules 2004 as amended. This procedure has not been followed in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wards the settled amount of duty. The balance amount of Rs. 3,01,82,322/- may be paid within 30 days from the date of receipt of this order. Interest: An amount of Rs. 79,040/- paid as interest is ordered to be appropriated towards interest liability. The Revenue is however given liberty to check the correctness of the amount and in case there is any shortfall, they should inform the same within 15 days, to the applicant who shall pay the amount within 15 days from the date of receipt of such communication from Revenue under intimation to Revenue and the Commission. Penalty: The Bench imposes a penalty of Rs. 30,00,000/-(Rupees thirty lakh only) on the applicant firm. The Bench also imposes a penalty of Rs. 1,00,000/- ( Rupees one lakh only) on coapplicant no1 and Rs. 2,00,000/- (Rupees two lakh only) on co-applicant no 2, under the provisions invoked in the SCN. The Bench grants the applicant and the co-applicants immunity from penalty in excess of the specified amounts. Prosecution: Subject to payments as above, the Bench grants immunity to the applicant and the coapplicants from prosecution under the Act and Rules framed thereunder as applicable in so far as this case i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r to inquiry report of the Commissioner(Investigation) dated 23.8.2016 as it was beyond the time prescribed in the statute and was by the same officer who had issued the show cause notice; on the question of quantum held that there were discrepancies in the assertions of the petitioner as there was no evidence with regard to transport of goods from Gujarat to Bhiwadi, Haryana and re-transportation of the goods from Bhiwadi to Gujarat, covering a distance of more than 1000 km. It was held as under: "41. In view of the above we have no hesitation in concluding that the applicant has deliberately manipulated records to show receipt of 1288.036 Mts of Copper Wire Rod B Grade from M/s Chandra Proteco Ltd (U- II), Silvassa to irregularly avail Cenvat Credit amounting to Rs. 6.10 crores. The entire economics of cost of raw material, burning losses, the price of finished goods, three wheeler tempo with a rated payload of 560 Kg shown to have twice carried 19.93/20.04 MT under invoice no 834 dated 27.12.11 and 845 dated 29.12.11 of Copper Wire Rod B Grade over a distance of 1195 km from Silvassa to Bhiwadi, denial by eight other owners/drivers/caretaker of trucks to have ever carried goo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... alleged that the entire show cause notice is only based on the statements of some persons. In support of his contention the applicant has produced copies of the invoices for the goods sent by M/s. Chandra Proteco Ltd(U-II). as also copies of invoices of the finished goods alleged to be manufactured by him and sent to M/s. Chandra Proteco Ltd.(U-II) alongwith documents showing the transportation of the said goods from Silvassa to Bhiwadi and back from Bhiwadi to Silvassa. In view of the discussions above, we find the contentions of the applicant to be improbable and unbelievable for the simple reasons that the applicant has shown a three wheeler tempo with a payload capacity of 560 kgs. to have transported nearly 20 tons of Copper Wire Rods 'B' Grade from Silvassa to Bhiwadi over a distance of 1195 kms on two occasions. Further the applicant has shown dispatch of the finished goods days before the receipt of the raw material. The denial by the owners, driver and caretaker of 8 vehicles to have carried the goods from M/s. Chandra Proteco Ltd.(D-II) to the applicant's premises coupled with losses of Rs. 4 Crores approximately calculated on the basis of documents produced by the appli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cords, evasion of substantial Central Excise duties, concealment and mis-representation of facts which the applicant continued to do even during the Settlement Proceedings, we reject the applicants' request for immunity from prosecution." 45. A reading of the impugned orders would show that the Settlement Commission did not accept the claim of the three petitioners that they had made 'full and true' disclosure of the duty liability. It had also opined on the petitioners' failure to disclose the manner in which the said duty liability was derived. Two essential pre-conditions for invoking jurisdiction of the Settlement Commission were therefore not satisfied. In the given facts, the Settlement Commission should have rejected the settlement applications and referred the case to the Central Excise Officer to decide the show cause notices issued to the parties on merits. However, notwithstanding the failure and non-satisfaction of the jurisdictional pre-conditions, the Settlement Commission proceeded to act as an adjudicating authority and has decided the show cause notice. This would be beyond the scope and power of the Settlement Commission, for the Settlement Commission is not an....