Bombay High Court High Court

4) Shri. R.M. Dalmia vs 1) Union Of India on 8 July, 2009

Bombay High Court
4) Shri. R.M. Dalmia vs 1) Union Of India on 8 July, 2009
Bench: F.I. Rebello, J. H. Bhatia
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            IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                      CIVIL APPELLATE JURISDICTION




                                                                        
                       WRIT PETITION NO. 2356 OF 2009




                                                
     (1) M/s. Alluminium Profiles Limited,
         a Public Limited Copmpany registered
         under the Indian Companies Act, 1956
         having its Registered Office at
         "Shivdarshan", 457/58, Market Yard,




                                               
         Pune 411 037.
     (2) Shri. Gurudatta J. Gavalkar,
         Age Adult, Occupation : Service,
         Managing Director,
         M/s. Alluminium Profiles Limited,




                                    
         A public limited company REGISTERED MAIL
         under hte Indian Companies Act, 1956
                    
         having its registered office at
         "Shivdarhan", 457/58, Market Yard,
         Pune 411 037.
                   
     (3) M/s. Crystal Corporation,
         4, Gayatri Commercial Premises,
         Behind Mittal Industrail Estate,
         Marol, Andheri (East),
         Mumbai 400 059.
      

     (4) Shri. R.M. Dalmia,
         Age Adult, Occupation - Business,
         Partner, M/s. Crystal Corporation,
   



         4, Gayatri Commercial Premises,
         Behind Mittal Industrial Estate,
         Marol, Andheri (East),
         Mumbai 400 059                          ...              Petitioners





                                          Versus

     (1) Union of India,
         Ministry of Finance,
         Department of Revenue,
         Central Board of Excise and Customs,





         North Block, New Delhi.
     (2) The Settlement Commission,
         Additional Bench,
         Customs and Central Excise,
         6th; Floor, Utpad Shulka Bhavan,
         Bandra (East),
         Mumbai 400 051.                        ....              Respondents




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                            CORAM : FERDINO I. REBELLO &
                                    J.H. BHATIA, JJ.

DATED : JULY 08, 2009

ORAL JUDGMENT (Per Ferdino I. Rebello,J.):

Rule. Heard forthwith.

After the matter was heard, the counsel for the Petitioner has made a

submission that the Petitioners are not contesting the order of the Settlement

Commission but only pray that they may be allowed to pay by installments. The

limited question is whether it is open to this court, in the exercise of its extra ordinary

jurisdiction, to grant installments to the Petitioners even when the Settlement

Commission itself in its order has not so provided.

2. The learned counsel for that purpose has placed for our consideration the

instructions issued by the Government of India, Ministry of Finance (Department of

Revenue), the Central Board of Excise and Customs dated 5th August, 1985 contained

in F. No. 289/56/85-CD.9. By that circular it is set out that the powers of the

Principal Collector of Central Excise to pay by installments have been withdrawn

and this issue had been under consideration of the Government for some time past.

The Government had now decided to delegate to Principal Collector of Central

Excise the power to grant, in individual cases, the facility of payment of Central

Excise dues upto twelve installments, on merits. The facility was to be granted only

in deserving cases, taking into account the financial position of the assessee, the long

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term interest of revenue and on the usual terms and conditions with simple interest

17.5% compounded at the end of each month chargeable from the date of

confirmation of the demand. This was further clarified by Circular No.32/32/94/CX

dated 11.4.1994. Relying upon these circulars, the learned counsel submits that it is

open to grant installments.

3. The application in the instant case was field on 31.5.2007. It was allowed to

be proceeded with on 22.01.2008. The Settlement Commission thereafter passed an

order on 31.10.2008.

Section 32F has been substituted by Act No. 22 of 2007 with effect from

1.6.2007. Section 32F(10) as it originally stood read as under :

“Where any duty payable in pursuance of an order

under sub section (7) is not paid by the assessee within

thirty days of the receipt of a copy of the order by him,

then, whether or not the Settlement Commission has

extended the time for payment of such duty or has

allowed payment thereof by installments, the assessee

shall be liable to pay simple interest at the rate of

eighteen per cent per annum or at such other rate as

notified by the Central Board of Excise and Customs

on the amount remaining unpaid from the date of

expiry of the period of thirty days aforesaid.”

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It would thus be clear that earlier this was power in the tribunal to grant

installments.

4. Earlier Petitioners had filed a petition before this court being W.P. No. 2005

of 2008 dated 20.6.2008 challenging the order dated 29.2.2008 passed by the

Commission in not allowing the application to be proceeded with. This court

by its order dated 20.6.2008 sent the matter back for fresh hearing. In the

instant case, after remand the application was allowed to be proceeded

considering section 32F as settled with effect from 1.6.2007 is relevant.

Section 32F(8) is relevant and which reads as under :

“The order passed under sub section (5) shall provide

for the terms of settlement including any demand by

way of duty, penalty or interest, the manner in which

any sums due under the settlement shall be paid and

all other matters to make th settlement effective and in

case of rejection contain the reasons therefor and it

shall also provide that the settlement shall be void if it

is subsequently found by the Settlement Commission

that it has been obtained ;by fraud, or

misrepresentation of facts.”

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5. While introducing the Bill, Clause 112 of the Finance Bill stated as under :

“Clause 112 seeks to substitute section 32F of the

Central Excise Act with a view to specify time limit at

every stage for the disposal of the application field

before the Settlement Commission, it, inter alia,

provides that in respect of an application filed on or

before 31st May, 2007, the order shall be passed by 28 th

February, 2008 and in respect of the application made

on or before 1st day of June, 2007, the order shall be

passed within nine months of the application. It also

provides that the amount of settlement ordered by the

Commission shall in no case be less than duty liability

admitted by the applicant. It further provides that the

settlement amount shall be paid within 30 days of the

receipt of the order and no extension for payment of

settlement amount shall be granted by the

Commission.”

From the above provisions, it would be clear that under sub sections 32F(8)

and (10) as it earlier stood, it was open to the settlement commission to make

payments by installments. No such specific provision has been made under section

32F(8) as now substituted. Under section 32F(9) the amount which remains unpaid

within 30 days of the direction to pay, then the sums can be recovered in the manner

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as set out under section 11. The two other provisions which are relevant are section

32M and 32N which reads as under :

“32M. Order of settlement to be conclusive – Every

order of settlement passed under sub section (5) of

section 32F shall be conclusive as to the matters stated

therein and no matter covered by such order shall, save

as otherwise provided in this Chapter, be reopened in

any proceeding under this Act or under any other law

for the time being in force.”

“32N. Recovery of sums due under order of settlement

– Any sum specified in an order of settlement passed

under sub section (5) of section 32F may, subject to

such conditions if any as may be specified therein, be

recovered, and any penalty for default in making

payment of such sum may be imposed and recovered

as sums due to the Central Government in accordance

with the provisions under section 11 by the Central

Excise Officer having jurisdiction over the person who

made the application for settlement under section 32E.”

6. Considering the above, it is clear that as the order of settlement commission

is final and mode of recovery is also set out therein, it will not be open to the

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Collector of Central Excise assuming that the circular of 5th August 1985 and

11.4.1994 to interfere with the order passed by the Settlement Commission,

which is exercising quasi judicial powers. In the circumstances, can a writ

court exercising extra ordinary jurisdiction, when the settlement commission

has thought it fit not to grant any installment, grant installments assuming that

under section 32F(8) there is an implied power to grant installments. This

court ordinarily, ought not to interfere in the exercise of its extra ordinary

jurisdiction with the order passed by the Settlement Commission.

7. Apart from that as we have pointed out the language of section 32F(10) as it

earlier stood read with section 32(7) provided for installments. That is not the

case now. In other words it must be assumed that the legislature has

expressly done away with the power to make payment by installments. In

respect of similar provisions pertaining to the Income Tax Act, by Finance

Act, 1984 w.e.f. 1.10.1984 the powers of the Settlement Commission to grant

payment by installments has been recognized. That continues till date. On the

other hand in the present legislation the power conferred under erstwhile

section 32F(10) has been omitted from section 32F as it now stands. This also

would indicate the legislative intent not to provide for installments.

8. For all the aforesaid reasons, we find that there is no merit in this matter.

Rule discharged. There shall be no order as to costs.

     (J.H. BHATIA,J.)                                    (FERDINO I. REBELLO,J.)




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