Gujarat High Court
Commissioner vs Maruti Fabrics....Opponent(S) on 26 June, 2014
Bench: M.R. Shah, K.J.Thaker
O/TAXAP/523/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 523 of 2014
With
CIVIL APPLICATION NO. 331 of 2014
In TAX APPEAL NO. 523 of 2014
With
TAX APPEAL NO. 562 of 2014
With
CIVIL APPLICATION NO. 343 of 2014
In TAX APPEAL NO. 562 of 2014
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COMMISSIONER....Appellant(s)
Versus
MARUTI FABRICS....Opponent(s)
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Appearance:
MR GAURANG H BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE K.J.THAKER
Date : 26/06/2014
COMMON ORAL ORDER
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 15.11.2013 passed by the learned Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (hereinafter referred to as "CESTAT") in Appeal Nos.1160411605/2013, the common appellant has preferred the present tax appeals with the following proposed questions of law.
"(i) Whether in the facts and circumstances of the case, the Ld. Tribunal is justified in the eye of law, in holding that the revenue has failed to establish the clandestine clearance of the goods by the assessee
- respondent, inspite of it being admitted in its Settlement Application dtd. 10012006 under Section 32E(1) of the Central Excise Act, 1944, before the Ld. Settlement Commission?
(ii) Whether in the facts and circumstances of the case, the Ld. Tribunal is justified in the eye of law, in holding that the statements of Shri Babubhai S. Patel and Shri Rajeshbhai A. Patel, were retracted Page 1 of 4 O/TAXAP/523/2014 ORDER and cannot be relied upon, through their statements dtd. 23072004 and 18052005 respectively, were never retracted, and also corroborated by other independent piece of evidence gathered during the investigation, regarding the clandestine clearance of the goods by the assessee - respondent?"
[2.0] Now, so far as the proposed question No.1 is concerned, Shri Bhatt, learned advocate appearing on behalf of the appellant has submitted that the learned Tribunal has materially erred in holding that the Revenue has failed to establish clandestine clearance of the goods by the assessee - respondent herein inspite of it being admitted in its Settlement Application dated 10.01.2006 under Section 32E(1) of the Central Excise Act, 1944 (hereinafter referred to as "act"), before the learned Settlement Commission. Shri Bhatt, learned advocate appearing on behalf of the appellant has vehemently submitted that in the application before the learned Settlement Commission submitted under Section 32E(1) of the Act, the respondent herein specifically admitted the charges as per the show cause notice and duty liability considering the value as CumDutyPrice and accepted the liability of the payment of duty of Rs.1,79,62,981/ (In Tax Appeal No.523/2014]. It is submitted that therefore considering subsection (2) of Section 32L of the Act, the said admission is required to be considered by the adjudicating authority to establish the clandestine clearance of the goods by the assessee - respondent.
[3.0] The aforesaid cannot be accepted as the same has no substance. Considering subsection (2) of section 32L of the Act, in a case where an order is passed by the Settlement Commission under subsection (1) of section 32L and thereafter adjudicating authority is required to adjudicate the case, the Central Excise Officer shall be entitled to use all the materials and other information produced by the assessee before the Settlement Commission or the result of inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings Page 2 of 4 O/TAXAP/523/2014 ORDER before it as if such materials, information, inquiry and evidence have been produced before such Central Excise Officer or held or recorded by him in the course of the proceedings before him on fair reading of sub section (2) of Section 32L of the Act whatever is admitted by the assessee while submitting the application before the Settlement Commission submitted under Section 32E(1) of the Act straightway cannot be said to be admission on behalf of the assessing accepting the liability. Whatever the material is produced alongwith the application and/or any material and/or other information produced by the assessee before the Settlement Commission or the result of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it can be used by the adjudicating authority as if such materials, information, inquiry and evidence has been produced before such Central Excise Officer, while adjudicating the show cause notice and the proceedings. If the contention on behalf of the appellant is accepted, in that case, there is no question of further adjudication by the Central Excise Officer with respect to the amount admitted by the assessee while submitting the application before the Settlement Commission submitted under Section 32E(1) of the Act. Once the application or proceedings before the Settlement Commission fails, the Central Excise Officer is required to adjudicate the entire proceedings and show cause notice. Under the circumstances, so far as proposed question of law No.1 is concerned, the present Tax Appeals deserve to be dismissed and are, accordingly, dismissed by answering the proposed question of law No.1 against the Revenue.
Tax Appeal No.523 of 2014 Tax Appeal No.523/2014 is ADMITTED to consider the following substantial question of law.
"Whether in the facts and circumstances of the case, the Ld. Tribunal is justified in the eye of law, in holding that the statements of Shri Babubhai S. Patel and Shri Rajeshbhai A. Patel, were retracted and Page 3 of 4 O/TAXAP/523/2014 ORDER cannot be relied upon, through their statements dtd. 23072004 and 18052005 respectively, were never retracted, and also corroborated by other independent piece of evidence gathered during the investigation, regarding the clandestine clearance of the goods by the assessee - respondent?"
Tax Appeal No.562 of 2014 Tax Appeal No.562/2014 is ADMITTED to consider the following substantial questions of law.
"1. Whether in the facts and circumstances of the case, the Ld. Tribunal is justified in the eye of law, in holding that the statements of Shri Babubhai S. Patel and Shri Rajeshbhai A. Patel, were retracted and cannot be relied upon, through their statements dtd. 23072004 and 18052005 respectively, were never retracted, and also corroborated by other independent piece of evidence gathered during the investigation, regarding the clandestine clearance of the goods by the assessee - respondent?
2. Whether in the facts and circumstances of the case, the said assessee - respondent is entitled to the benefit of cum - duty price in case the demand is held to be sustainable in the eye of law?
3. Whether in the facts and circumstances of the case, the penaly may be imposable under Section 11AC of the Central Excise Act, 1944, as well as, the interest under Section 11AB of the said Act, in csae the demand is held to be sustainable in the eye of law?"
OJ Civil Application Nos.331/2014 and 343/2014 Shri Gaurang Bhatt, learned advocate appearing on behalf of the applicant does not press the present applications at this stage with a liberty to file fresh applications for stay in case of necessity.
Under the circumstances, both these applications are dismissed as not pressed at this stage with above liberty.
Sd/ (M.R. SHAH, J.) Sd/ (K.J. THAKER, J.) Ajay Page 4 of 4