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Principal Collector of Central Excise to pay by installments have been withdrawn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