Suresh Kumar Verma Vs Customs Central Excise And Service Tax (Delhi High Court)
Delhi High Court held that once the settlement commission concludes that there has been no true and fair disclosure of facts, the settlement commission cannot proceed to adjudicate the liability.
Facts-
The petitioners engaged in the manufacture of zarda and packing pouches, had their premises searched by the respondent/revenue. The search proceedings were triggered, it appears, based on intelligence gathered by the respondent/revenue that zarda was being manufactured by using six (6) pouch packing machines.
This led to the matter being investigated which culminated in the issuance of show cause notices. Insofar as petitioners nos.1, 2 and 5 are concerned, they were served with a show cause notice dated 14.08.2015.
It is not disputed by learned counsel for the parties that each of the petitioners filed applications before the Settlement Commission. Learned counsel for the parties say that these applications are dated 04.07.2017. The Settlement Commission, based on the applications, passed the impugned orders.
Conclusion-
Held that once the Settlement Commission concludes that there has been no true and fair disclosure of facts and the manner in which the liability has been derived, the Settlement Commission, in our opinion, cannot then proceed to adjudicate the liability.
This emerges upon a plain reading of Section 32E1 of the 1944 Act. Unless the twin conditions mentioned therein are fulfilled, the Settlement Commission cannot move further in the matter.
The petitioners have got practically no benefit in approaching the Settlement Commission, as the quantum of liability which was indicated in the aforementioned show cause notice(s) is practically what has been the thrust on them via impugned orders.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This writ petition is directed against the order dated 14.03.2018 and corrigendum dated 27.03.2018, passed by the Customs, Central Excise & Service Tax Settlement Commission, Principal Bench, New Delhi [in short “Settlement Commission”].
2. The impugned orders came to be passed by the Settlement Commission in the backdrop of the following broad facts:
2.1 The writ petitioners (which includes proprietorship concerns as well) who were engaged in manufacture of zarda and packing pouches, had their premises searched by the respondent/revenue.
2.2 The search proceedings were triggered, it appears, based on intelligence gathered by the respondent/revenue that zarda was being manufactured by using six (6) pouch packing machines.
2.3 This led to the matter being investigated which culminated in the issuance of show cause notices. Insofar as petitioner nos. 1, 2 and 5 are concerned, they were served with a show cause notice dated 14.08.2015. Likewise, the petitioner nos. 1, 3 and 4 were served with show cause notice dated 29.11.2016.
2.4 Insofar as the show cause notice dated 14.08.2015 was concerned, a corrigendum was issued on 27.03 .2017. The corrigendum was limited to the aspect of noticees‟ being required to file their response qua the aforementioned show cause notice(s), with the Assistant Commissioner, Central Excise, Division, Nayyer Colony, Civil Lines, Faizabad, U.P. as against the Commissioner, Central Excise Commissioner ate, Ashok Nagar, Lucknow.
2.5 It is not disputed by learned counsel for the parties that each of the petitioners filed applications before the Settlement Commission. Learned counsel for the parties say that these applications are dated 04.07.2017. The Settlement Commission, based on the applications, passed the impugned orders.
2.6 We may note that pursuant to the impugned orders being passed, the respondents raised a demand on the petitioners vide notice dated 06.04.2018. The details of the demands raised via the said notice are extracted hereafter:
