SUNSHINE PAINTS Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Articles 226 and 227 of the Constitution of India challenges orders dated 14th September, 2010 and 31st December, 2009 as well as order dated 8th October, 2007 passed by the Settlement Commission, Additional Bench, Customs and Central Excise, Mumbai, insofar as it imposes penalty of Rs. 15 lakhs each, on both the petitioners. The facts of the case as appearing in the petition are that the petitioner, a registered partnership firm, is engaged in the business of paints. The Directorate General of Central Excise (Intelligence), Ahmedabad issued a show cause notice dated 21st June, 2006 alleging short payment of excise duty to the extent of Rs. 51,76,676/- on clandestine clearances. The Petitioner No. 1 instead of entering into protracted litigation, voluntarily and in good faith made an application for settlement before the Settlement Commission on 15th May, 2007 under the provisions of Section 32E of the Central Excise Act, 1944 (the Act). Between 22nd December, 2004 to 2nd June, 2007, the petitioner paid the entire duty amount of Rs. 51,76,676/-. It is the case of the petitioners that during the course of hearing before the Settlement Commission, the petitioners had pleaded that as the duty amount had been voluntarily paid and the petitioners had also co-operated in the proceedings, this was a fit case for not levying any penalty. Vide order dated 8th October, 2007, the Commission accepted the settlement application. However, over and above charging of interest, the Commission imposed penalty of Rs. 15 lakhs each on both the petitioners totalling to Rs. 30 lakhs, in all. Being aggrieved, the petitioners approached this Court by way of a writ petition being Special Civil Application No. 28680 of 2007. By a common judgment and order dated 25th September, 2008 passed in the said petition and other cognate matters, the petition came to be allowed by setting aside the order of the Settlement Commission to the extent the same challenged or confined the challenge regarding non-waiver of penalty and fine. For this limited aspect, the matter was remanded to the Settlement Commission for a fresh consideration on this aspect, and for this purpose to issue fresh notice to the petitioners and pass a fresh order in accordance with law after considering the various orders as well as the judicial pronouncements that may be referred to and relied upon by the petitioners and pass a reasoned order with specific reason while dealing with the matter.

(2.) Vide order dated 31st December, 2009, the Settlement Commission, after hearing the petitioners and considering the submissions advanced on behalf of the petitioners, confirmed its earlier view that the extent of waiver from penalty had been rightly determined in the present case keeping in view the relevant facts and statutory provisions while laying down the terms of settlement vide admission-cum-final order dated 8th October, 2007. The Commission was accordingly of the view that no modification in any of the terms of the settlement application already disposed of was called for.

(3.) Being aggrieved, the petitioners again approached this Court by way of writ petition being Special Civil Application No. 3510 of 2010 which came to be disposed of vide order dated 15th April, 2010 in the following terms:--