Bombay High Court
Union Of India vs M/S.Manmade Spinners India Ltd. ... on 2 November, 2017
Bench: B.R. Gavai
205-WP-2214.2006
BDPSPS
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2214 OF 2006
Union of India through ]
The Commissioner of Central Excise ]
Pune-II, ICE House, 41/A, Sasoon Road ]
Opp. Wadia College, Pune -1 ] .... Petitioner.
V/s
1] M/s Manmade Spinners India Ltd., ]
Tilwani, Tal - Hatkanangale ]
Dist - Kolhapur ]
]
2] Hon'ble Settlement Commission ]
Additional Bench Customs and Excise ]
Mumbai, having its office at Utpad, ]
Shukla Bhavan, Bandra-Kurla Complex, ]
Bandra (E), Mumbai - 400 051 ] ..... Respondents.
Mr. Swapnil Bangur i/b Mr. Sham V. Walve, Advocate for the
Petitioner.
Mr. Jas Sanghavi i/b PDS Legal, Advocate for Respondent No.1.
CORAM: B. R. GAVAI &
SANDEEP K. SHINDE, JJ.
DATE: 2nd November, 2017
ORAL JUDGMENT: (Per B.R. Gavai, J.)
1] This Petition challenges the order passed by the Settlement
Commission, thereby allowing the application filed by Respondent
205-WP-2214.2006
No.1 for settling the matter.
2] The facts, in brief, giving rise to the present Petition are as
under:-
3] Respondent No.1 is holding central excise registration and is
engaged in the manufacture of "Polyester Viscose Yarn" of different
varieties, falling under Chapter 55 of the First Schedule to the Central
Excise Tariff Act, 1985. On a surprise visit conducted by the Officers
of the Anti Evasion Branch of Central Excise, Kolhapur in the factory
of Respondent No.1, it was found that the RG-1 Register was written
up to 31.12.2000 only and the last date of payment of Central Excise
duty was 15.01.2001, for the clearances made against Invoices No.
528 dated 01.01.2001 to 540 dated 15.01.2001. It was found that the
clearances, which were made on the basis of various invoices, were
made on the date much prior to 15.01.2001, which were not
accounted for in the statutory register or in the returns filed with the
Department. It was therefore found that the case of evasion of duty
was made out.
4] After investigation, show cause notice came to be issued on
03.11.2003, demanding Central Excise duty amounting to Rs
57,10,404/- and also invoking the penal provisions under the Central
Excise Act and the Rules made thereunder. However, it appears that
Respondent No.1, during the course of investigation itself, admitted
the liability and paid the amount which was found to be short
205-WP-2214.2006
alongwith interest thereon. Respondent No.1, therefore, filed an
application before the Settlement Commission under the provisions of
Section 32E of the said Act.
5] The application was vehemently opposed by the the Petitioners
by raising various grounds. However, the contention of the Revenue
was rejected and the settlement was permitted. The Settlement
Commission granted to Respondent No.1 immunity from the penal
action. However, Respondent No.1 was directed to pay interest.
Being aggrieved thereby, the present Petition has been filed.
6] Mr. Bangur, learned Counsel appearing on behalf of the
Revenue, submits that the learned Tribunal has grossly erred in not
taking into consideration the law laid down by the Chennai High Court
in the case of Commr of Cus. (AIR), Chennai vs. CUS. & C. Ex.
Settlement Commission1. He further submits that since Respondent
No.1 had not filed returns, provisions of Section 32E of the said Act
could not have been invoked. He therefore submits that the order of
the learned Settlement Commission is liable to be set aside.
7] Mr. Sanghavi, learned Counsel appearing on behalf of
Respondent No.1, submits that the order passed by the learned
Tribunal is just and proper and warrants no interference.
8] Insofar as the judgment of the Chennai High Court in Commr of
1 2002 (139) E.L.T. 512 (Mad.)
205-WP-2214.2006
Cus. (AIR), Chennai (cited supra) is concerned, the learned Tribunal
has distinguished the said judgment and observed that the said case
was with regard to smuggling. However, the present case was not
with regard to smuggling. The learned Tribunal has further noted
that under the provisions of the Customs Act, there is a specific bar for
invoking jurisdiction of the Settlement Commission in a case involving
smuggling. As such, the Tribunal has rightly distinguished the said
judgment.
9] Insofar as the second ground with regard to Respondent No.1
not filing returns is concerned, we find that the same is without merit.
Firstly, the learned Tribunal has itself found that Respondent No.1 was
filing returns. Apart from that, in view of second proviso to sub-
section 1 of Section 32F of the said Act, even if the returns are not
filed, the learned Tribunal, on being satisfied that the application can
be entertained, is empowered to entertain the application. In that
view of the matter, we find that even in the case of non-filing of the
returns, the learned Tribunal is not without jurisdiction to entertain
the application, if it finds that a case is made out. The Division
Bench of this Court in Tata Teleservices (Maharashtra) Ltd. vs. Union of
India1 has taken a view that jurisdiction of the Settlement Commission
is wide enough to take within its compass all kinds of settlement
claim, depending upon the nature and circumstances of case and
complexity of case. The legislative intent behind Section 32E is to
encourage the full and true disclosure of the duty liability and make
1 2006 (201) E.L.T. 529 (Bom)
205-WP-2214.2006
payment thereof by the defaulters, while granting them immunity
from the penal action.
10] It would be relevant to refer to the following observations of
Division Bench of this Court in the case of Tata Teleservices
(Maharashtra ) Ltd (cited supra) while considering the pari materia
provisions of the Customs Act.
"44. The entire approach with regard to
such legislation is to unearth frauds and
dishonesty so as to collect the revenue for
the Government. By this process in fact the
duty which was illegally not paid by
various parties would ultimately come to
the Revenue and if one were to restrict the
interpretation to mean only the bonafide
cases, then there would be no scope of
unearthing the revenue for the
Government............"
The view, as expressed by the Division Bench of this Court, has been
affirmed by the Apex Court in its judgment in the case of Union of
India vs. Tata Teleservices (Maharashtra) Ltd.1
11] This Court, would entertain the Petition under Article 226
arising out of the order of the statutory Tribunal, only if it is found
that the view taken by the Tribunal is either perverse or impossible.
No perversity or impossibility is noticed in the order of the learned
Tribunal. The learned Tribunal has given cogent and sound reasons as
1 2016 (338) E.L.T. A293 (S.C.)
205-WP-2214.2006
to why it felt it appropriate to entertain the grievance of Respondent
No.1.
12] In that view of the matter, no case is made out for interference.
Petition is rejected. Rule stands discharged.
(SANDEEP K. SHINDE, J. ) (B. R. GAVAI, J. )
