VICTORIA BLEACHING & DYEINGARA GOUNDER THOTTAM Vs. CUSTOMS & CENTRAL EXCISE SETTLEMENT COMMISSION

JUDGEMENT

(1.) Heard Mr.T.Ramesh the learned counsel appearing for petitioner and Mr.A.P.Srinivas, the learned Senior Standing Counsel for the respondents.

(2.) The petitioner has filed this Writ Petition, challenging the order passed by the first respondent/Customs and Central Excise Settlement Commission (for short, Settlement Commission) rejecting the petitioner's application for settlement of the case.

(3.) A show cause notice, dated 06.06.2002 was issued by the second respondent, by which, the petitioner was directed to pay Central Excise duty, amounting Rs.5,60,660/- under Section 11 A (1) Central Excise Act, 1944, (hereinafter, referred to as the ACT) and to show case as to why penalty should not be imposed under Rule 173 Q of the Rules and penalty under Section 11 A C of the Act and interest should not be demanded. The petitioner approached the Settlement Commission, by filing an application for settlement of their case, adding that they have purchased polyester yarn and cleared the same, without duty due to severe competition in the market, especially, since the buyers were not willing to bear the burden of duty element and accept the entire duty amount demanded in the show cause notice. The Settlement Commission, while rejecting the application, by the impugned order, did not allow the application to be proceeded with, in terms of Section 32 F (1) of the Act, as the petitioner did not satisfy the condition in Clause (a) of Section 32 E (1) (a). The said condition being that, the applicant should have filed returns, showing production, clearance and Central excise duty paid in the prescribed manner. The explanation offered by the petitioner appears to have not been considered in the proper perspective by the Settlement Commission. The Court is convinced to make such observation, in the light of the communication between the petitioner and the Superintendent of Central Excise, Range I, Tiruppur, by letter dated 30.01999. The petitioner informed the Central Excise Department that, they are dyeing cotton yarn, cotton fabric, and 100% polyester yarn, for dyeing at their factory, under Section 57 F(3) challan and they have an idea to do job work for dying of blended yarn and 100 polyester yarn. Therefore, the petitioner enclosed the copy of the application for registration with schedule, factory site plan and the photostat copy of the partnership deed. In response to the said report, the Superintendent of Central Excise, by a reply, dated 08.12.2000, stated as follows:-