2018 (7) TMI 184 – BOMBAY HIGH COURT – 2018 (15) G. S. T. L. 317 (Bom.) , 2018 (362) E.L.T. 486 (Bom.) – Rejection of settlement application – demand of service tax and eligible of Cenvat Credit – The impugned order is primarily passed on the basis of the fact that there was no proper explanation from the petitioner qua his claims. They did not produce requisite documents in support of settlement inspite of requisition being sent to them – Held that:- In the present case, respondent no.2 proceeded on interim report of revenue and before receipt of final report, the impugned order was passed. In pursuant to order dated 13th April, 2017, passed by Settlement Commission allowing application under Section 32E to be proceeded with, it was expected that respondent no.2 would look into all material aspects by giving sufficient opportunity to assessee to establish his claim in the application.
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For any inaction on the part of Revenue to submit Final Verification Report, the petitioners c
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ation filed by the petitioner as not maintainable under Section 32E (1) of the Central Excise Act, 1944. 4 The petitioner is the proprietary concern engaged in the business of providing hydraulic cranes on hire basis for construction activities to various clients such as M/s.Larsen and Toubro, M/s.HCC, M/s.Michigan Engineering etc. 5 The petitioner were served with show-cause notice dated 19th October, 2013 demanding service tax amounting to ₹ 1,88,23,722/-, for the period of 2008-09 to 2012-13, alongwith interest, proposing to appropriate 1,03,88,821/-, already paid by the petitioner and proposing imposition of penalty for alleged willful suppression of material facts. 6 According to the petitioner, the amount stood paid and ST-3 returns were filed even prior to the issuance of showcause notice, and the fact that CENVAT Credit is available to the petitioner which was already verified by the department in the show-cause notice. However, the Adjudicating Authority was not inclined
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the objection was that the petitioner had not filed ST-3 Return for the financial year 2008-09 and they have not paid late fee for the ST-3 Returns filed belatedly. The petitioner forwarded his reply to the notice dated 27th March, 2017, and, tendered explanation. 8 The application came up for hearing on 19th May, 2017, before respondent no.2. It was pointed out that after the period of show-cause notice, there is no further demand made against the petitioner. It was prayed that penalty and prosecution may be waived. The petitioner was called upon to submit documents to the Jurisdictional Revenue Authorities for verification of availability of CENVAT Credit. The petitioner submitted all the required documents vide letter dated 19th May, 2017. No response was received from the office of the Jurisdictional Revenue Authorities till the reminder dated 9th June, 2017, was received requesting for certain documents. Thereafter, the petitioner received another letter dated 14th June, 2017, en
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ent no.2 relied upon erroneous Report of the Jurisdictional Revenue Authorities and rejected the Settlement Application vide order dated 21st August, 2017, on the ground that the same is not maintainable. 9 Mr.Prakash Shah, learned counsel for the petitioner assailed the impugned order on several grounds and submitted that the order suffers from vice of non-application of mind. He submits that respondent no.2 has committed an error in holding that the petitioner has not submitted documents, as directed. It is submitted that letter dated 25th May, 2017, which was purportedly issued to the petitioner was not received by them and, thereafter, a reminder was sent to the petitioner on 9th July, 2017. They were directed to submit the documents referred to in the letter dated 25th May, 2017. The petitioner forwarded their response on 12th June, 2017. The Jurisdictional Authority, issued letter dated 14th June, 2017, seeking all documents mentioned therein within two days. The letter was recei
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s and submitted all relevant documents vide letter dated 19th May, 2017. The Interim Report of the Jurisdictional Revenue Authority suffers from serious infirmities. The petitioner had forwarded reply dated 30th June, 2017, which speaks otherwise. The impugned order erroneously states that the petitioner has failed to comply with the order and had not provided with documents to the Jurisdictional Revenue Authority despite repeated reminders. Mr.Shah, relied upon the decision of this Court in the case of Poona Tools Pvt. Ltd. Vs. Union of India 2015(323) E.L.T. 572 (Bom.). 10 Mr.Jetly, learned counsel for the respondents submitted that the submissions of the petitioner are devoid of merits. Respondent no.2 has taken into consideration all material aspects and rejected the Settlement Application. He submitted that sufficient opportunity was given to the petitioner to produce requisite documents, but, the petitioner have not responded. The grievance of the petitioner is afterthought. He s
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e Authority for verification. It was obligatory on the part of the petitioner to submit records and excuses were made vide letter dated 30th June, 2017. In this case, neither ST-3 Returns were filed at the relevant time nor the petitioner provided the CENVAT Credit Register evidencing the CENVAT Credit. They did not produce original invoice before the Revenue Authority despite directions from the Bench. It is, thus, submitted that no fault can be noted in the impugned order since the Settlement Commission has taken into consideration facts and circumstances of the case and did not find it to be a fit case for settlement under Section 32F(5) of the Central excise Act. 11 We have gone though the documents annexed to the petition. The petitioner has prayed that the order passed by the Settlement Commission be set aside and respondent no.2 be direccted to reconsider the Settlement Application after proper consideration of the facts of the matter and the submissions made by the petitioner.
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ter dated 13th April, 2017, stating that the case under reference is allowed to be proceeded with vide order dated 7th April, 2017 of the Bench. Apparently, respondent no.2 has relied upon the report of the Jurisdictional Revenue Authority. The petitioner had dealt with the Interim Report vide reply dated 30th June, 2017, contending that the documents were provided except CENVAT Credit Register, which was maintained by the Chartered Accountant, who was travelling abroad at the relevant time. The grievance of the petitioner is that the Interim Report was sent to respondent no.2 without providing the petitioner an opportunity to submit any documents. Apart from that, the discrepancies in the Report were explained and the amount not paid due to an inadvertent error and the challan showing the same were annexed to the reply. It appears that the reply dated 30th June, 2017, forwarded by the petitioner was not taken into consideration in proper perspective. The impugned order indicates that
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received on 16th June, 2017. Respondent no.2 has recorded an adverse finding that no documents, as required were submitted by the petitioner and whereas, it is their case that all relevant documents were forwarded under covering letter dated 19th May, 2017, wherein it was specifically mentioned that any further clarification required may be requested and would be duly provided in the interest of settlement of the matter. 12 The impugned order also mentions that no one from the Revenue had appeared during the hearing on 19th May, 2017, and no Final Report of the Jurisdictional Revenue Authority was forthcoming despite awaiting the same. However, in the reply, the petitioner have stated that certain letters addressed to them were omitted in the Report of the Jurisdictional Revenue Authority. The said report was accepted. The impugned order records that the petitioner has failed to comply with the order and not provided documents to the Jurisdictional Revenue Authority, despite reminders
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The petitioner also did not produce original invoices before the Revenue Authority. On these grounds, the application was rejected. It is apparent that the application was basically rejected on the ground of non-production of documents. The contention of the petitioner that all the documents was on record and in the event there was any specific requisition from the respondent no.2 to file certain documents, he was ready to produce the same. For all these reasons stated above, it appears that respondent no.2 has hurriedly rejected the application for Settlement without giving sufficient opportunity to the petitioner. In the decision of this Court in the case of Poona Tools Pvt. Ltd. (Supra) relied upon by the petitioner the order of the Settlement Commission was challenged on the ground that it is in violation of principles of natural justice. It was contended that the procedure contemplated under Section 32E and 32F of the Central Excise Act was scrupulously followed and on being sati
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isdictional Revenue Authority further hearing. The impugned order makes the note that no one from Revenue had appeared for hearing on 19th May, 2017 and the final report of the said Authority was not forthcoming. The Interim Report was faulted vide reply filed by petitioner. It appears that the order was passed without appreciation of facts of the matter. 14 In the light of the aforesaid circumstances, it would be appropriate to remand the proceedings back to respondent no.2 for fresh consideration by setting aside the impugned order: 15 In view of the above, we pass the following order: ORDER (i) Rule is made absolute in terms of prayer clause (a); (ii) The impugned order dated 21st August, 2017, passed by respondent no.2 is set aside and the respondent no.2 is directed to reconsider the Settlement Application after giving opportunity to the parties concerned and after hearing them and to decide the application in accordance with law; (iii) It is clarified that we have not expressed a
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