Case Law Details
Diksat Transworld Limited Vs Commissioner of Service Tax (Madras High Court)
Conclusion: When the Commission itself categorically made a finding that it was not possible to settle the matter and documents and evidences were to be examined by the Adjudicating Authority, then there was no much scope for the High Court to interfere with the orders passed and by sending the matter back to the Adjudicating Authority, assessee would also get an opportunity to produce all the documents and evidences to establish his case. Thus, sssessee had not established any acceptable reasons for the purpose of interfering with the order passed by the Settlement Commission.
Held: Assessee-company stated that they got registered under the Commissionerate of Central Excise and Service Tax and got the Registration Certification on 04.03.2008. It availed the benefits of Finance Act, 2013 on 18.09.2014, which provided Voluntary Compliance of Encouragement Scheme (VCES) and paid the dues and the first respondent issued the acknowledgement. Thereafter, the first authority issued the show cause notice on 20.10.2014 alleging certain arrears of service tax. Thus, assessee had invoked the jurisdiction of Settlement Commission by filing an application under Section 32E of the Central Excise Act, 1944 on 09.12.2016. The Settlement Commission without considering the grounds raised by assessee, rejected their claim and returned the case back to Adjudicating Authority. The main contention of assessee was that despite true declarations made by assessee in Form VCES-1 and despite an acknowledgement of discharge in Form VCES-3 issued by the authority on 18.09.2014, the second authority ventured to reopen the case in a deliberate manner violating the provisions made under Section 18(2) of the Finance Act, 2013, Service Tax Voluntary Encouragement Scheme, 2013. At the outset, it was contended that assessee-company had made a true declaration and had cooperated for the settlement of the issues before the Commission and thus, the order passed by the second authority was to be set aside. Authority disputed the said contentions by stating that the provision was very clear under Section 32L wherein, power of the Settlement Commission to send the case back to the Central Excise Officer was enumerated. As per Section 32L, if a person has not cooperated with the Settlement Commission in the proceedings before it, then the Commission is well within its powers to send the case back to the competent adjudicating authority. It was held that the findings made in the impugned order would reveal that the complex nature of mixed question of law would be sufficient for the purpose of sending the matter back to the adjudicating authority. When such a finding was arrived by the Settlement Commission, High Court in a writ proceedings could not direct the Commission to settle the issue. When the Commission itself categorically made a finding that it was not possible to settle the matter and documents and evidences were to be examined by the Adjudicating Authority, then there was no much scope for the High Court to interfere with the orders passed and by sending the matter back to the Adjudicating Authority, assessee would also get an opportunity to produce all the documents and evidences to establish his case. Settlement of disputes could never be claimed as a matter of right. The provisions for settlement were provided in a statute enabling the aggrieved person to come out with true facts and settle the issue peacefully to avoid prolongation and protraction of disputes. Thus, the settlement provisions were made for the welfare of the assessees and the said provisions were to be implemented in its spirit and the provisions for settlement could not be dealt with reference to the disputes, if any, exist between the parties. In the event of no dispute and if the person approaching the Settlement Commission could able to furnish true disclosure of the facts and circumstances, then he was entitled to settle the matter and therefore, settlement itself could not be conferred as a right and it was only an enabling provision to get peace from the disputes and such a provision could be invoked, only if a person approaching the Commission was truthful in his disclosure of facts and other duty payments. This Court had no hesitation in arriving a conclusion that assessee had not established any acceptable reasons for the purpose of interfering with the order passed by the Settlement Commission.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The Final Order No.27 of 2017-ST dated 25.05.2017 passed by the Customs, Central Excise & Service Tax Settlement Commission (hereinafter referred to as “the Settlement Commission”) is under challenge in the present writ petition.
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