TaxTMI 
TaxTMI 
2026 (8) TMI 1410
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid direction contained in Clause (e) from the remaining part of the order passed by the Settlement Commission and challenge the same in isolation. 2. The controversy raised in the present Writ Petition is confined to the liability of the Petitioners to pay interest on the amount determined as payable pursuant to the order of the Settlement Commission. FACTUAL MATRIX: 3. Before proceeding to examine the controversy, it would be apposite to notice the relevant factual background leading to the passing of the order dated 14.11.2019 by the Settlement Commission. In the Counter-affidavit, the Respondents have set out the facts in the following manner, which are not disputed by the Petitioners: 1. That on the basis of intelligence gathered Directorate of Revenue Intelligence, Mumbai Zonal Unit (hereinafter referred to as 'DRIMZU' or 'DRI') had booked case against M/s NITCO Ltd., Petitioner No. 1 in the year 2009. During the course of investigations, it was seen that Petitioner No. 1 had indulged in various contraventions which are briefly summarised below: (i) Evasion of Customs duty / Anti-dumping duty in import of Tiles from China by over-val....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment Commission, New Delhi, for settlement of issues relating to the import of Marble covered by 7 Show Cause Notices, which was settled vide order dated 30.05.2013 had also prayed for settlement of the issues pertaining to misuse of EPCG Authorisations for which Show Cause Notice was yet to be issued as investigation was pending. However, the Hon'ble Principal Bench, vide its Final Order dated 30.05.2013, settled the matter in relation to import of marbles and rejected the application in so far as EPCG related issue which was not covered in the said seven SCNs. 3. Petitioner No. 1, i.e. M/s Nitco Ltd., subsequently, filed another Application No. 3743/2013 dated 13.06.2013 before the Hon'ble Principal Bench, Settlement Commission, New Delhi, for settlement of EPCG issue, for which Show-Cause Notice was yet to be issued for want of completion of investigation. The Applicant prayed for settlement of EPCG issue related to 10 EPCG Authorisations- nine Authorisations issued by office of DGFT, Mumbai & one Authorisation issued from DGFT, Delhi. The Hon'ble Principal Bench vide its Final Order No. F-1897/CUS/14-SC(PB) dated 30.06.2014 settled the matter in so far as i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is barred from approaching the Commission as provided under Section 127L of the Act. 6. Meanwhile, investigations were conducted by DRI, MZU pertaining to exports purported to be effected by M/s Nitco Ltd. against the impugned licence and a SCN dated 18.06.2018 was issued demanding a duty of Rs. 10,29,81,146/- along with interest from them. The said SCN was adjudicated by the Commissioner of Customs (Export), Mumbai Customs Zone - I vide order-in-original dated 13.03.2019 which was dispatched on 22.03.2019. Meanwhile, the Petitioner filed application for settlement of the impugned SCN before the Hon'ble Settlement Commission, Principal Bench, New Delhi on 13.03.2019. After hearing the Applicants i.e. Nitco and co-applicants, the Hon'ble Commission vide order dated 14.11.2019 settled the duty liability at Rs. 6,69,57,333/- out of which an amount of Rs. 1,41,49,366/- was already paid by the Petitioner. Therefore, the final duty liability was arrived at Rs. 5,28,07,967/-. The Petitioner themselves had quantified an interest component at Rs. 1,10,04,634/- before the Hon'ble Commission which directed the jurisdictional Commissioner to quantify the interest liability....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of limitation is prescribed, the statutory authority is required to exercise its jurisdiction within a reasonable period. 7. Per contra, learned SSC representing the Respondent submits that the order passed by the Settlement Commission is conclusive by virtue of Section 127J of the Act. It is contended that the Petitioners, instead of pursuing the adjudication proceedings arising from the SCN, voluntarily invoked the jurisdiction of the Settlement Commission and subjected the dispute to settlement. Having elected to pursue such remedy and having obtained an order of settlement, the Petitioners cannot now be permitted to reopen or challenge the very SCN which formed the subject matter of the settlement proceedings. 8. No other submissions have been made by the learned senior counsel and learned SSC representing the respective parties. ANALYSIS AND FINDINGS: 9. At the outset, it would be appropriate to examine the scope of interference by this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, with an order passed by the Settlement Commission in exercise of its statutory and discretionary jurisdiction. 10. The Supreme Court, in J....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Paragraph No. 13 of Kotak Mahindra (supra), as under: 13. Before parting with the record, we may add that having regard to the legislative intent, frequent interference with the orders or proceedings of the Settlement Commission should be avoided. We have already indicated the limited grounds on which an order or proceeding of the Settlement Commission can be judicially reviewed. The High Court should not scrutinize an order or proceeding of a Settlement Commission as an appellate court. Unsettling reasoned orders of the Settlement Commission may erode the confidence of the bona fide Assessees, thereby leading to multiplicity of litigation where settlement is possible. This larger picture has to be borne in mind." (Emphasis supplied.) 13. The aforesaid principles are of particular relevance in the present case. The jurisdiction of this Court under Article 226 of the Constitution is undoubtedly wide. However, while examining an order of the Settlement Commission, this Court is not called upon to reassess the material before the Commission or substitute its own view for that of the Commission. The enquiry is confined to whether the impugned order suffers from any....
X X X X Extracts X X X X
X X X X Extracts X X X X
....istinct issue and would have to be examined independently, if otherwise maintainable. The challenge to the validity of the SCN, however, cannot be permitted to be indirectly raised by isolating the direction relating to quantification of interest from the order of settlement as a whole. 18. This Court may now turn to the submissions advanced on behalf of the Petitioners with regard to the alleged limitation of the SCN dated 18.06.2018. The first submission of learned senior counsel for the Petitioners is that the said SCN was issued beyond the period prescribed under Section 28 of the Act. It is contended that, in terms of Clause (d) of Explanation 1 to Section 28, the relevant date for computation of the period prescribed under Section 28(4) ought to be reckoned from 06.11.2006, when the duty was paid. Alternatively, it is contended that the period ought to be reckoned from the year 2009, when the alleged short-payment and fraud came to the knowledge of the DRI. 19. In the considered view of this Court, the aforesaid submissions cannot be examined in the present proceedings in the manner sought by the Petitioners. The SCN dated 18.06.2018 was not merely at the stage of initi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sdiction and settled the dispute, suffers from any jurisdictional error, contravention of the statutory provisions, prejudice, fraud, bias or malice so as to warrant interference within the limited parameters of judicial review. 23. There is yet another circumstance which assumes significance. The Petitioners themselves had placed before the Settlement Commission their computation of the interest liability at Rs. 1,10,04,634/-. The Settlement Commission did not finally accept the said computation as the definitive amount of interest payable. Instead, it directed the jurisdictional Commissioner to quantify the interest liability and intimate the Petitioners if any further amount was found payable. The direction contained in Clause (e) of Paragraph No.51(ii), therefore, was in the nature of a consequential direction for determination of the interest liability and did not revive or reopen the adjudication of the underlying duty liability. 24. The subsequent determination of interest by the jurisdictional Commissioner at Rs. 15,16,65,821/- is, therefore, required to be viewed separately from the Petitioners' challenge to the validity of the SCN. If the Petitioners contend that th....