The Madras High Court held that there is no scope for the High Court to interfere when Customs, Central Excise & Service Tax Settlement Commission remads matters to the Adjudicating Authority.
The petitioner, M/s.Diksat Transworld Limited states that they got registered under the Commissionerate of Central Excise and Service Tax and got the Registration Certification. The petitioner availed the benefits of Finance Act, 2013, which provided Voluntary Compliance of Encouragement Scheme (VCES) and paid the dues and the first respondent issued the acknowledgement. Thereafter, the first respondent issued the show cause notice alleging certain arrears of service tax. Thus, the petitioner had invoked the jurisdiction of the Settlement Commission by filing an application under Section 32E of the Central Excise Act, 1944. The Settlement Commission, without considering the grounds raised by the petitioner, rejected their claim and returned the case back to the adjudicating authority.
Ms.V.Kirubalini, the counsel for the petitioner that despite true declarations made by the petitioner in Form VCES-1 and despite an acknowledgement of discharge in Form VCES-3 issued by the respondent on 18.09.2014, the second respondent ventured to reopen the case in a deliberate manner violating the provisions made under Section 18(2) of the Finance Act, 2013, Service Tax Voluntary Encouragement Scheme, 2013. At the outset, it is contended that the petitioner has made a true declaration and had cooperated for the settlement of the issues before the Commission and thus, the order passed by the The Customs, Central Excise & Service Tax Settlement Commission is to be set aside.
On the other hand, Senior Standing Counsel appearing on behalf of the respondents disputed the said contentions by stating that the provision is very clear under Section 32L of the Act wherein, power of the Settlement Commission to send the case back to the Central Excise Officer is enumerated. As per Section 32L, if a person has not cooperated with the Settlement Commission in the proceedings before it, then the Commission is well within its powers to send the case back to the competent adjudicating authority.
The Single Judge Bench of Justice S.M.Subramaniam ruled that the findings made in the impugned order would reveal that the complex nature of mixed question of law would be sufficient for the purpose of sending the matter back to the adjudicating authority. When such a finding is arrived at by the Settlement Commission, High Court in a writ proceedings cannot direct the Commission to settle the issue. When the Commission itself categorically made a finding that it is not possible to settle the matter and documents and evidences are to be examined by the Adjudicating Authority, then there is no much scope for the High Court to interfere with the orders passed and by sending the matter back to the Adjudicating Authority, the petitioner would also get an opportunity to produce all the documents and evidences to establish his case.
“Settlement of disputes can never be claimed as a matter of right. The provisions for settlement are provided in a statute enabling the aggrieved person to come out with true facts and settle the issue peacefully to avoid prolongation and protraction of disputes. Thus, the settlement provisions are made for the welfare of the assessees and the said provisions are to be implemented in its spirit and the provisions for settlement cannot be dealt with reference to the disputes, if any, exist between the parties. In the event of no dispute and if the person approaching the Settlement Commission could able to furnish true disclosure of the facts and circumstances, then he is entitled to settle the matter and therefore, settlement itself cannot be conferred as a right and it is only an enabling provision to get peace from the disputes and such a provision can be invoked, only if a person approaching the Commission is truthful in his disclosure of facts and other duty payments,” the Court observed.
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