ORDER
/ CEX /MGR/2008 (Annexure-H), and order dated 8/1/2008 bearing No. 07/CEX/MGR/2008 (Annexure-C) made by the Customs & Central Excise Settlement Commission, Additional Bench, Mumbai ('Settlement Commission').
2. The facts are that pursuant to show cause notice dated 18/5/2005 during pendency of proceedings, an application came to be moved before Settlement Commission by the petitioner company on 27/5/2007 admitting duty liability of Rs. 23,80,732/-.
3. Before the application dated 27/5/2007 was filed, a separate show cause notice in relation to a different period came to be issued on 30/11/2006. During pendency of the proceedings relatable to the second show cause notice, petitioner submitted a letter dated 30/5/2007 before the Settlement Commission with reference to the second show cause notice dated 30/11/2006, and admitted duty liability of Rs. 19,12,1296/-.
4. On 8/1/2008 Settlement Commission heard the matter and accepted application dated 27/5/2007 in relation to show cause notice dated 18/5/2005, while in relation to the second application, in the form of letter dated 30/5/2007, Settlement Commission recorded as under:
5. The applicant, vide letter dated 30-05-2007, submitted that in addition to the amount of Rs. 23,80,732/- it wished to accept and disclose an additional liability of duty amounting to Rs. 14,63,733/-. It further submitted that out of this liability it has already paid an amount of Rs. 13,95,880/- vide following TR-6 Challan Nos.
Sr. No. TR6 Challan No. & Date Amount1 02/2004-05 dated 09.12.2004 2,00,000/-2 03/2004-05 dated 17.12.2004 2,00,000/-3 04/2004-05 dated 21.12.2004 2,00,000/-4 05/2004-05 dated 27.12.2004 2,25,000/-5 06/06 dated 23.08.2006 5,70,880/-TOTAL 13,95,880/-The applicant further submitted that the amount of duty has been evaded by it by clearing the goods clandestinely, the details of which have been submitted in a sealed cover along with the said SCN.
6. It is observed that the applicant, vide letter dated 30.05.2007, has disclosed an additional duty liability amounting to Rs. 14,63,733/-. The applicant had further submitted that the amount of duty has been evaded by it by clearing the goods clandestinely and the details of which are as mentioned in Annexure-I in sealed cover. The applicant made it appear as if this disclosure pertains to the application filed on 22.05.2007. On closer scrutiny, it is clear that the additional disclosure of Rs. 14,63,783/- is with reference to another Show Cause Notice, different from the Show Cause Notice No. V(Ch. 73 & 84) 3-01/Dem/05 dated 18.05.2005 issued by Additional Commissioner, Central Excise & Customs, Vapi, for which application was filed on 22.05.2007 by the applicant. The applicant has created confusion and is also seeking to create confusion in the proceedings before the Settlement Commission by obfuscating the issues. However, since the facts show that the applicant earnestly wants to come clean in respect of the clandestine clearances covered by a different Show Cause Notice, the Commission grants applicant the liberty to file a fresh and amended application separately in respect of the said Show Cause Notice with the Commission. Such an application, when filed, will be deemed to have been filed on 30.05.2007, i.e., the date on which the application in letter form came to be filed by him.
5. Subsequently the petitioner preferred one more application dated 5/5/2008 before Settlement Commission, stated to be in compliance with the observations made in paragraph No. 6 of the order of Settlement Commission dated 8/1/2008. After hearing the parties, this application has been rejected by the Settlement Commission, by observing as under:
7.1 The Bench has gone through the records of the case and the submissions made by the applicant and the Revenue. It is seen that the applicant received the Admission-cum-Final Order No. 07/CEX/MGR/2008 dated 08.01.2008 of the Bench on 14.01.2008. The applicant took more than three and a half months to file the present application. The applicant finally filed the application on 05.05.2008. In the meantime, the said SCN was adjudicated by the Joint Commissioner of Central Excise & Customs, Vapi. In the instant case, the application filed by the applicant is deemed to have been filed on 30.05.2007. Asper Sub-section (6) of Section 32F of the Act, an order under sub section (5) shall not be passed in respect of an application filed on or before the 31st day of May, 2007, later than the 29th day of February, 2008 and in respect of an application made on or after the 1st day of June, 2007, after nine moths from the last day of the month in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under Section 32E had been made.
7.2 In view of the above, the applications filed by the applicants on 05.05.2008 are liable to be rejected and are rejected under Section 32F(1) of the Act.
6. Learned advocate for the petitioner has vehemently assailed the order of Settlement Commission dated 10/7/2008 and also a part of the order dated 8/1/2008, in so far as the Settlement Commission had directed to treat petitioners' application as deemed to have been filed on 30/5/2007. It is submitted by learned advocate that when one considers the Scheme of the provisions by which Settlement Commission is entitled to exercise powers in terms of provisions of Section 32F of the Act while processing an application made under Section 32E of the Act, Settlement Commission could not have observed in its first order dated 8/1/2008 as regards treating the subsequent application as 'deemed to have been filed on 30/5/2007', because, by virtue of amended sub section (6) of Section 32F of the Act w.e.f., 1/6/2007 Settlement Commission would have only up to 29/2/2008 to make an order and otherwise the proceedings would abate. That in the circumstances the said direction made in first order dated 8/1/2008 could not have been complied with and Settlement Commission itself could not have made an order in accordance with law, even if such a fresh application had been made immediately on receipt of the order of Settlement Commission, namely 14/1/2008. That, therefore, as a consequence, the second order of Settlement Commission dated 10/7/2008 rejecting application also suffered from a legal infirmity and the petition was required to be allowed accordingly.
7. Learned Counsel appearing for the respondent authorities submitted that, if the second order dated 10/7/2008 is perused, it would indicate that the application which was filed on 5/5/2008 was taken up for hearing on 4/6/2008 and, thus the hearing had taken place within a period of 29 days. Thus it was incorrect on part of the petitioners to state that Settlement Commission could not have acted in accordance with the requirement of provisions. It was further submitted that the first order dated 8/1/2008 had been received by the petitioner on 14/1/2008, despite which the second application had been moved only on 5/5/2008. That, in the circumstances there was no error committed by the Settlement Commission in any of its orders so as to warrant intervention.
8. Sub-section (6) of Section 32F of the Act reads as under :
(6) An order under Sub-section (5) shall not be passed in respect of an application filed on or before the 1st day of May, 2007, later than the 29th day of February, 2008 and in respect of an application made or or after the 1st day of June, 2007, after nine months from the last day of the month in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority before whom the proceedings at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under Section 32E had been made.
9. This Section came to be substituted by the Finance Act, 2007 with effect from 1/6/2007. Prior to this point of time, there was no time limit fixed for making an order under Section 32F of the Act. A plain reading of Sub-section (6) of Section 32F of the Act indicates that the provision lays down two different termini for completion of proceedings. The first termini is dated 29/2/2008 in relation to an application made on or before 31/5/2007; and the second point of limitation prescribed is a period of nine months from the last day of the month in which the application is filed, being an application filed on or after 1/6/2007.
10. In the facts of the present case, admittedly, the petitioner had moved Settlement Commission on 30/5/2007 in the form of a letter in relation to the second show cause notice dated 30/11/2006. Therefore, if the Settlement Commission in its first order dated 8/1/2008 recorded that the application in the prescribed form should substitute the letter dated dated 30/5/2007, by treating such an application as having been deemed to have been filed on 30/5/2007, no fault can be found with the Settlement Commission. The test is, if instead of letter dated 30/5/2007, the petitioner had moved a separate application in the prescribed form on 30/5/2007 itself, the statutory period of limitation which expires on 29/2/2008, would have come into play. That is the only way one can read the order considering the facts and circumstances of the case.
11. In these circumstances, the second order of Settlement Commission dated 21/7/2008 cannot also be said to suffer from any legal infirmity. Apart from this, the fact remains that despite the first order having been received by the petitioner on 14/1/2008, the petitioner chose to wait till 5/5/2008 before preferring the application, permitted to be filed, for substituting the letter dated 30/5/2007. The petitioner was not permitted to file a fresh petition as if no previous proceedings had taken place, permission granted by Settlement Commission was in relation to substituting the application, filed in form of letter, by filing an application for settlement in the prescribed format. No other right was granted to the petitioner so as to permit the petitioner to contend that the period of limitation can only be counted as if the petition had been preferred on or after 1/6/2007.
12. There is one more aspect of the matter which is also fatal to the petitioner's case. The petitioner accepted the entire order dated 8/1/2008, inclusive of the observation made by the Settlement Commission, in relation to the letter dated 30/5/2007 being required to be substituted. If the petitioner was aggrieved by the said observation, the petitioner ought to have challenged the said order at the relevant point of time. Having permitted the said order to operate, the petitioner cannot be heard to make a grievance that the said observation was incorrectly made by Settlement Commission. In fact, as recorded hereinbefore, the Settlement Commission had not made any error in law in making the said observation in first order dated 8/1/2008.
13. Thus, in the facts and circumstances of the case not only there is no error in first order dated 8.1.2008 made by the Settlement Commission, but the second order dated 21.7.2008 also does not suffer from any legal infirmity so as to call for any interference in exercise of extra ordinary jurisdiction.
14. In the result, the petition is rejected with no order as to costs. Notice discharged.