GUJARAT CYPROMET LTD Vs. UNION OF INDIA (UOI)

JUDGEMENT

(1.) PETITIONER has approached the High Court challenging order dated 1 -8 -2007 made by the Settlement Commission, Additional Bench, Customs & Central Excise, Mumbai, under Section 32 -F(7) of the Central Excise Act, 1944 ('the Act'), to the extent the impugned order imposes penalty of Rs. 20,00,000/ - and directs charging of interest at the rate of 10% per annum on duty payable on all goods removed from the date of removal up to the date of payment of duty thereon.

(2.) THE principal contention on basis of which the impugned order is assailed partially, namely to the extent of imposition of penalty and levy of interest, is that the Settlement Commission has not assigned any reason while arriving at the figure of Rs. 20,00,000/ - while imposing penalty and applying rate of 10% per annum while directing levy of interest. In support of the submissions made reliance was placed on an unreported judgment of this Court rendered on 25 -9 -2008 in case of Nissan Copper Ltd., Unit No. 1 and 2 v. Union of India Through Secretary and 1, in Special Civil Application No. 4896 of 2008 and cognate matters, to submit that when no reasons are assigned, the order of Settlement Commission cannot be upheld. It was submitted that the impugned order should be set aside and restored to the file of Settlement Commission for deciding the aforesaid issues afresh. Learned Counsel also placed reliance on judgment of Bombay High Court in the case of West Coast Ingots Pvt. Ltd. v. Union of India,2008 232 ELT 21, to submit that in a case where it is shown that there was non application of mind, the Court can always interfere. The next judgment was in case of Competent Engineers v. Commissioner of C.Ex., Jalandhar, 2007 220 ELT 36, to submit that non assigning of reasons for rejection of a claim would give rise to a situation where the Court can exercise discretionary jurisdiction under Article 226 of the Constitution. Apex Court judgment in case of C.B. Gautam v. Union of India and Ors., 1992 6 JT 678, was also pressed into service to submit that assigning of reason was always necessary even if the provision did not envisage such a requirement. Lastly, Madras High Court decision in case of Shri Renuga Soft -X Towels, (Spinning and Towels Division) represented by its General Manager, N.P. Perumal and Ors. v. The Commissioner of Central Excise and the Customs and Central Excise Settlement Commission, (Additional Bench), 2008 229 ELT 359 was pressed into service.

(3.) LEARNED Counsel for the respondent authority invited attention to judgment of this Court in case of Kashish Silk Mills Pvt. Ltd. v. Union of India, rendered on 13 -9 -2004 in Special Civil Application No. 12919 of 2003, to submit that once there was absence of jurisdictional error in the impugned order, it was not open to the High Court to exercise extraordinary jurisdiction under Article 226 of the Constitution. Responding to the submissions of the otherside, learned Counsel placed reliance on the following two decisions of the Apex Court to submit that assigning of reasons is not always necessary, as held by the Supreme Court: (1) Union of India and Ors. v. E. Nambudiri, 1991 AIR(SC) 1216(2) Jyotendmsinhji v. S.I. Tripathi and Ors., 1993 AIR(SC) 1991 Inviting attention to the pronouncement made in paragraph No. 16 of the second judgment, learned Counsel submitted that the entire proceedings before Settlement Commission were in the form of a package deal, and the Court had limited jurisdiction while examining order of Settlement Commission. The Court could only examine as to whether Settlement Commission had followed procedure which was legal and whether the order was contrary to any of the provisions of the Act. Beyond that the Court had no jurisdiction as held by the Apex Court.