M/S Icon Industries v. UOI & Ros

SANJIV KHANNA, J. AUGUST 02, 2011 NA

* IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15926/2006 % Date of decision: 2nd August, 2011. M/S ICON INDUSTRIES ..... Petitioner Through Mr. Pradeep Jain and Mr. Shubhankar Jha, Advs. versus UOI & ORS. ..... Respondent Through Mr. Satish Kumar, Sr. Standing Counsel. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? Yes. 3. Whether the judgment should be reported in the Digest ? Yes. DIPAK MISRA, CJ:- Being dissatisfied with the order dated 9th March, 2006 passed by the Settlement Commission in Settlement Application No.1133/2006, the petitioner has preferred this writ petition under Articles 226 and 227 of the Constitution of India for quashment of the same. 2. The facts which are requisite to be stated are that the petitioner M/s. Icon Industries (Unit-I & II) filed a the settlement application in respect of the proceedings initiated vide SCN C.No.IV (Hqrs. Prev.) 15/5/03/2598 dated 8th April, 2005 issued by the Commissioner, Central Excise, Delhi-I. The Settlement Commission adverted to the various facts and submissions put forth and eventually came to hold that the search was conducted on 7th February, 2003 and thereafter units of the petitioner were registered on 18th February, 2003. After that, consolidated return was filed with the Department. It was contended before the Commission that after the search, a sum of Rs.50 lacs was deposited with the Department towards duty and, therefore, the petitioner is entitled to get the benefit of approaching the Settlement Commission. 3. The Settlement Commission opined that the units were registered only after the search was conducted and prior to that there was no registration and no returns as mandated by clause (a) to Section 32E(1) of the Central Excise Act, 1944 (Act, for short) were filed. Being of this view, the Commission has held that the application does not conform to the parameters as stipulated under Section 32E (1) of the Act. Be it noted, before the Commission reliance was placed on the decision of the Special Bench of five members rendered in M/s Emerson Electric Company India Pvt. Ltd. 2005 (189) ELT 377 (Settlement Commission). As far as the petitioner"s case is concerned, the bench constituted of three members distinguished the decision in M/s Emerson Electric Company India Pvt. Ltd.(supra) on the ground that the said decision is not applicable as the petitioner has filed consolidated returns belatedly. 4. Mr. Pradeep Jain, learned counsel for the petitioner would contend that the Commission has faulted in not following the decision of the Special Bench, though the Special Bench has addressed to the said issue in specific terms and given a finding that even a belated return filed before enquiry or show cause, will entitle an assessee to put forth his grievance before the Settlement Commission and claim the benefit. 5. Learned counsel has invited out attention to paragraph 11(b) of the decision, which reads as follows:- "(b) Whether a consolidated return filed just before filing the application or along with the application by a person who is not registered with Central Excise and did not obtain ECC Number can be considered as satisfying the condition in Clause (a) of Sec. 32E(1) of the CEA, 1944. Answer No. Though Section 32E(1) does not refer to Rule 12 of the C.E. Rules under which ER1/ER3 returns are prescribed, since the said returns contain details of excisable goods manufactured, cleared and duty paid in the prescribed manner, the said return can be deemed to be the "return" referred to in Section 32E(1). Therefore, even if the views of the counsels that clause (a) of the first proviso to Section 32E(1) lays down for filing of returns in the prescribed manner are to be accepted, then too as per Rule 12 of the Central Excise Rules, 2002, "returns" are to be filed by an assessee on a monthly/quarterly basis. There is no