LAXMI NARAYAN SYNTHETICS Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule.Ms. DN Raval, learned Senior Standing Counsel for the Central Government waives service of Rule on behalf of the respondents. In the facts and circumstances of the case, the petition is taken up for final disposal today.

(2.) What is challenged in this petition under Article 226 of the Constitution is the order dated 24.2.2003 of the Settlement Commission, Customs & Central Excise, Mumbai in Settlement Application Nos.13 and 31 of 2000 under Section 32F of the Central Excise Act, 1944.

(3.) The brief facts leading to filing of this petition, briefly stated, are as under:- The petitioner is registered under the Central Excise Act, 1944 (hereinafter referred to as "the Act") to manufacture/process man-made fabrics. The searches carried out by the officers of the Central Excise at the premises of M/s. Balaji Industries, Surat, another processor, and it's folding and transport contractors on 6.11.1997 resulted into seizure of certain incriminating documents, indicating clandestine removal of processed fabrics by the petitioner. To verify the facts, the officers of the Central Excise Department searched the factory premises of the petitioner on 6.11.1997 and also its customers on 7.11.1997 and seized the documents for further investigation. It is not necessary to set out all the details of the material seized or the value of the material clandestinely removed. The Commissioner of Central Excise issued a common show cause notice to the petitioner and M/s. Balaji Industries, inter-alia, demanding central excise duty of Rs.2.13 Crores. The Commissioner of Central Excise passed order-in-original dated 24.2.1999 confirming the demand of Rs.2,18,88,141/and also imposed penalty of Rs.3 lakhs on Mr Rajendra Agarwal. The petitioner challenged the said order-in-original by filing appeal before the CEGAT. After permission was granted by the CEGAT, the petitioner withdrew the appeal and filed an application before the Settlement Commission under Section 32PA of the Act and admitted additional duty liability of Rs.28,07,319-08ps. Mr Rajendra Agarwal, partner of the petitioner, also filed an application before the Settlement Commission. The applications were heard by the Settlement Commission on 17.1.2001 an order was passed on 6.2.2001 with certain directions to the petitioners. After hearing, the interim order dated 27.4.2001 was passed allowing the applications to be proceeded with by the Commission. After giving adjustment of the amount paid by the merchant manufacturers towards admitted duty liability, the petitioner was directed to pay the balance admitted amount aggregating to the total duty of Rs.28,07,319-08. By the impugned order, the Commission determined the excise duty liability of the petitioner at Rs.1,48,19,820.00 and after giving credit of Rs.28,07,319.00 already paid by the petitioner and the traders, the Commission held that the balance duty payable by the petitioner was Rs.1,20,12,501.00. Penalty of Rs.10 lakhs was also imposed on the petitioner. Certain directions regarding waiver of interest were granted in excess of 10%.