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Writ jurisdiction - High Court in exercise of powers under Article 226 cannot act as second appellate court to interfere with Settlement Commission's factual findings absent perversity: HC

By TIOL News Service

CHENNAI, SEPT 26, 2016: CHALLENGING the order passed by the second respondent viz., Customs and Central Excise, Settlement Commission, the Commissioner of Central Excise filed this Writ Petition before the High Court.

The first respondent filed an application before the Settlement Commission stating that they have manufactured and cleared passenger car parts falling under Chapter heading 8708 of the Schedule to Central Excise Tariff Act, 1985, to Ford India Ltd. from 1.6.1999 to 15.7.2000, without including amortized tool cost in the assessable value, thereby undervaluing the said car parts and evading central excise duty of Rs.79,09,483/- which was proposed to be demanded vide show cause notice 17.6.2003.

The first respondent vide their letter dated 11.10.2003 accepted the entire duty liability and also agreed for appropriation of duty debited on 14.7.2000 and 20.7.2000 towards the accepted duty liability. The application was resisted by the Commissioner by reiterating the facts mentioned in the show cause notice.

The Settlement Commission after examining the facts and considering the submissions on both sides, recorded a factual finding that the explanation of the first respondent that the tooling agreement with M/s.Ford India was completed only on 13.7.2000 and that they paid the duty involved immediately thereafter on 14.7.2000 and 20.7.2000, indicated the reason why they could not pay the duty earlier. Furthermore, the Settlement Commission noted that there are no other mala fides. Thus, on facts, the Settlement Commission has taken a decision on the first respondent's application, wherein the first respondent has accepted the entire duty liability and also noted the fact that after the first respondent agreed for the appropriation, only after a period of about three years, show cause notice was issued.

Therefore, in the light of the factual finding recorded by the Commission, the High Court held that it will not act as if it is a Second Appellate Authority over the orders passed by the Commission, in the absence of any perversity in the order while exercising jurisdiction under Article 226 of the Constitution of India.

(See 2016-TIOL-2247-HC-MAD-CX)


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