IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.13485/2017 (T – TAR) BETWEEN:
M/S. PURPLE EXIM ENTERPRISES No.114, PANTRAPALYA KENGERI HOBLI, NAYANDAHALLI MYSORE ROAD, BANGALORE-560039 PRESENT ADDRESS:
GROUND FLOOR BACK 350B & 351 C, PHASE 2 HAROHALLI, INDUSTRIAL AREA KANAKAPURA BANGALORE-562112 REP. BY SHRI ANIL KUMAR DUGAR [AUTHORIZED SIGNATORY]. ... PETITIONER [BY SRI PRADYUMNA.G.H., ADV.] AND:
1. UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE NORTH BLOCK, NEW DELHI REP. BY REVENUE SECRETARY.
2. CUSTOMS, CENTRAL EXCISE & SERVICE TAX SETTLEMENT COMMISSION ADDITIONAL BENCH, II FLOOR NARMADA BLOCK, CUSTOM HOUSE No.60, RAJAJI SALAI CHENNAI-600001 REP. BY COMMISSIONER OF CENTRAL EXCISE 3. THE COMMISSIONER OF CENTRAL EXCISE BANGALORE III COMMISSIONERATE P.B. No.-5400, QUEENS ROAD CENTRAL REVENUE BUILDING BANGALORE-560001.
4. THE ADDITIONAL COMMISSIONER OF CENTRAL EXCISE BANGALORE III COMMISSIONERATE P.B. No.-5400, QUEENS ROAD CENTRAL REVENUE BUILDING BANGALORE-560001. …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER No.36/2016 C.EX DATED 30.09.2016 VIDE ANNEXURE-J PASSED BY THE HON’BLE SETTLEMENT COMMISSION, CHENNAI AND ETC., THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioner has assailed the order No.36/2016 C.EX. dated 30.09.2016 passed by the Settlement Commission, Chennai.
2. The petitioner is a Partnership Firm engaged in the manufacture of Adhesive and Self-Adhesive Tapes falling under Chapter Heading 3919 1000 of the First Schedule to the Central Excise Tariff Act, 1985 (referred to as ‘Central Excise Tariff’ for short). The petitioner is holder of Central Excise Registration No.AANFP1125CEM002. It transpires that during the course of investigation undertaken by the Officers of Central Excise, Bangalore-III Commissionerate, records/documents of the petitioner were verified and statements of the Partners as well as that of Sri. Anil Kumar Dugar, Authorized Signatory were recorded under the provisions of Section 14 of Central Excise Act, 1944 (‘the Act’ for short).
3. Show cause notice dated 27.11.2015 was issued by the Additional Commissioner of Central Excise, Bangalore-III, Commissionerate, Bangalore - respondent No.4 to the petitioner on the allegation of contravention of Central Excise law and demanding excise duty totalling to Rs.16,12,153/- payable for the period from February 2012 to November 2013 along with interest and penalties.
4. The petitioner filed an application before the Customs, Central Excise and Service Tax Settlement Commission, Additional Bench, Chennai – respondent No.2 for settlement of the case in terms of Section 32-E of the Act which was dispatched by the petitioner’s counsel on 2.4.2016 by speed post. It was allowed to be processed with, by the respondent No.2 in terms of section 35-F of the Act and the same was communicated to the petitioner. Later the jurisdictional commissioner reported that the order in original dated 28.03.2016 was passed by the Additional Commissioner of Central Excise, Bangalore-III Commissionerate adjudicating the show cause notice in respect of which the application had been filed. The Settlement Commission after hearing the parties, passed the order impugned rejecting the Settlement Application as not maintainable on the ground that the petitioner had failed to make true and full disclosure of the matter in as much as it had withheld the fact of the adjudication order passed by the Additional Commissioner. Hence, this writ petition.
5. Learned counsel Sri. Pradyumna G.H., appearing for the petitioner submitted that indisputably the adjudication order dated 28.3.2016 was dispatched by the Central Excise Department through speed post on 5.4.2016 and delivered to the petitioner on 6.4.2016 whereas the Settlement Application which was dispatched through the counsel for the petitioner on 2.4.2016 through speed post had reached the Settlement Commission on 4.4.2016 but eventually delivered to respondent No.2 on 5.4.2016. The Settlement Application was made prior to adjudicating the order passed by the Additional Commissioner of Central Excise. The Settlement Commission rejecting the application as not maintainable subsequent to passing of the order passed in terms of section 32-F(1) of the Act is wholly unsustainable. The object of introducing settlement provision in Central Excise law to encourage voluntary compliance and for settlement of the dispute without giving scope for protracted litigations has been defeated by the action of the Settlement Commission in rejecting the application.
6. Having heard the learned counsel for the petitioner and perusing the material on record, it is not in dispute that the applications were filed on 5.4.2016 under Section 35-E of the Act. The first notice was issued to the petitioner on 7.4.2016 to which the reply dated 11.4.2016 was made and the same was received by the Commission on 18.4.2016.
7. The applications were allowed to be proceeded with by the Commission. It is only on the report submitted by the Jurisdictional Commissioner dated 15.4.2016, the impugned show cause notice before the Commission being adjudicated by the Additional Commissioner, Bangalore-III Commissionerate vide order in original dated 28.3.2016 was noticed by the Commission. In the reply dated 11.4.2016 to the first notice, the petitioner has not brought to the notice of the Commissioner in as much as the adjudication order passed by the Addl. Commissioner in pursuant to the show cause notice. In such circumstances, the Commission held that the petitioner has not only failed to make a true and full disclosure but gave a false declaration about the case pending and accordingly rejected the application. Full and true disclosure to the satisfaction of the Commission is sine qua non to consider the Settlement Application from the initiation of the proceedings till the conclusion thereof. The Commission is empowered to reject the application at any stage if it comes to its knowledge that the applicant/co-applicant has failed to make a true and full disclosure. The Settlement Commission to arrive at the conclusion of rejecting the application has placed reliance on the judgment of the Hon’ble High Court of Delhi in the case of Central Excise Vs.True Woods Pvt Ltd., 2006(199)ELT 388(Del.) which has been upheld by the Apex Court reported in 2006 (201) ELTA 130 (SC). In view of the aforesaid, no exception can be found with the order impugned.
For the aforegoing reasons, the writ petition stands dismissed with liberty to the petitioner to resort to appropriate proceedings, if permissible under law.
Sd/- JUDGE NC.