Case: M/S. Duncans Industries Ltd., Calcutta Vs. Commissioner Of Central Excise,New Delhi

issue before the Commissioner of Central Excise, Delhi was also for determination of the assessable value of the goods for the period September, 1981 to February, 1983, the period covered by show cause notice dated 1.10.1986. The show cause notice dated 1.10.1986 was issued against 20 persons including the assessee company. As regards the assessee, for the period September, 1981 to February, 1983, the Commissioner of Central Excise passed the order dated 27.3.1991 directing the Assistant Commissioner to determine the assessable value taking into consideration the materials contained in show cause notice dated 1.10.1986. This he did by noticing the correct position of law laid down by this Court in the case of Union of India vs. Godrej & Boyce Mfg. Co. (Pvt.) Ltd., (Civil Appeal No.12824 of 1989 decided on 8.3.90). The Assistant Collector Central Excise, Kharda Division, Calcutta thereafter issued addendum dated 20.2.992 incorporating the allegations made in show cause notice dated 1.10.1986 in the show-cause notice dated 8.5.1984. The effect of the order passed by the commissioner of Central Excise, Delhi was that the Assistant Collector Central Excise, Kharda Division, Calcutta alone had the jurisdiction to finally adjudicate and determine the assessable value of the goods cleared from the assessees factory for the entire period and the consequent duty liability. Either party wishing to dispute the determination made by the Assistant Collector Central Excise, Kharda Division, Calcutta had to do so by invoking the right of appeal to the Commissioner of Appeals, Tribunal and the Supreme Court. In addition the Department could have invoked the short levy provision under Section 11-A within a period of six months or invoked the extended period of limitation of 5 years under proviso to Section 11-A provided the conditions laid down in the proviso were satisfied. The two show-cause notices were finally adjudicated by the Assistant Collector Central Excise, Kharda Division, Calcutta on 11.01.1996. The assessable value determined and consequent demand was raised by finalizing assessments for the entire period July 1973 to February, 1983. If the revenue was aggrieved by the above proceedings it was incumbent upon them to either invoke the right of appeal against that order under Section 35 E (2) or issue a short levy notice under Section 11-A within six months. Neither of these two options having been invoked, the order attained finality as against the revenue.23. It need not be emphasized that there could not be two assessments for the same period.24. This apart finally determined as due for the entire period of 10 years from the assessee having been settled under the Kar Vivad Samadan Scheme, 1998, there is no scope for any further review or determination of that issue by any authority under the Act. 25. In Hira Lal Hari Lal Bhagwati vs. CBI. 2003 (5) SCC 257 , at page 274 this Court observed: "We have carefully gone through the Kar Vivad Samadhan Scheme, 1998 and the certificate issued by the Customs Authorities. In our opinion, the GCS is immune from any criminal proceedings pursuant to the certificates issued under the said Scheme and the appellants are being prosecuted in their capacity as office-bearers of the GCS. As the customs duty has already been paid, the Central Government has not suffered any financial loss. Moreover, as per the Kar Vivad Samadhan Scheme, 1998, whoever is granted the benefit under the said Scheme is granted immunity from prosecution from any offence under the Customs Act, 1962 including the offence of evasion of duty. In the circumstances, the complaint filed against the appellants is unsustainable." 26. And at page 280 it was observed: "The Kar Vivad Samadhan Scheme certificate along with CBI v. Duncans Agro Industgries Ltd., 1996 (5) SCC 591 , and Sushila Rani v. C.I.T., 2002 (2) SCC 697 , judgments clearly absolve the appellants herein from all charges and allegations under any other law once the duty so demanded has been paid and the alleged offence has been compounded. It is also settled law that once a civil case has been compromised and the alleged offence has been compounded, to continue the criminal proceedings thereafter would be an abuse of the judicial process." 27. Thus, after the grant of certificate under the Kar Vivad Samadan Scheme, 1998 as having settled the dispute and payment of the amount determined no further proceedings could be initiated or proceeded with for the period in question.28. For the reasons stated above, we do not find any substance in the appeals filed by the Revenue. Accordingly, Civil Appeal Nos. 4075-4076 of 2001 are dismissed and the order passed by the Tribunal in this respect is affirmed. 29. Taking up the appeal of the assessee, it may be noted that the proposed penalty was under Rule 9(2) and 52-A. This Court in N.B. Sanjana vs. Elphinstone Spg. & Wvg. Mills Co. Ltd., 1971 (1) SCC 337 , at page 348 held as under: ".....To attract sub-rule (2) of Rule 9, the goods should have been removed in contravention of sub-rule (1). It is not the case of the appellants that the respondents have not complied with the provisions of sub-rule (1). We are of the opinion that in order to attract sub- rule (2), the goods should have been removed clandestinely and without assessment. In this case there is no such clandestine removal without assessment. On the other hand, goods had been removed with the express permission of the Excise authorities and after order of assessment was made. No doubt the duty payable under the assessment order was nil. That, in our opinion, will not bring the case under sub-rule (2). " 30. In the present case there is not even an allegation much less finding by the department that there has been any clandestine removal of goods without assessment. As such the penalty is liable to be set aside. The matter having been settled in the Kar Vivad Samadan Scheme, 1998 the question of determination of the duty payable or levy of penalty did not arise.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]22. The issue before the Assistant Collector Central Excise, Kharda Division, Calcutta was for the determination of the assessable value of the goods for the period July, 1973 to February, 1983 i.e. the period covered by the show cause notice dated 8.5.84. The issue before the Commissioner of Central Excise, Delhi was also for determination of the assessable value of the goods for the period September, 1981 to February, 1983, the period covered by show cause notice dated 1.10.1986. The show cause notice dated 1.10.1986 was issued against 20 persons including the assessee company. As regards the assessee, for the period September, 1981 to February, 1983, the Commissioner of Central Excise passed the order dated 27.3.1991 directing the Assistant Commissioner to determine the assessable value taking into consideration the materials contained in show cause notice dated 1.10.1986. This he did by noticing the correct position of law laid down by this Court in the case of Union of India vs. Godrej & Boyce Mfg. Co. (Pvt.) Ltd., (Civil Appeal No.12824 of 1989 decided on 8.3.90). The Assistant Collector Central Excise, Kharda Division, Calcutta thereafter issued addendum dated 20.2.992 incorporating the allegations made in show cause notice dated 1.10.1986 in the show-cause notice dated 8.5.1984. The effect of the order passed by the commissioner of Central Excise, Delhi was that the Assistant Collector Central Excise, Kharda Division, Calcutta alone had the jurisdiction to finally adjudicate and determine the assessable value of the goods cleared from the assessees factory for the entire period and the consequent duty liability. Either party wishing to dispute the determination made by the Assistant Collector Central Excise, Kharda Division, Calcutta had to do so by invoking the right of appeal to the Commissioner of Appeals, Tribunal and the Supreme Court. In addition the Department could have invoked the short levy provision under Section 11-A within a period of six months or invoked the extended period of limitation of 5 years under proviso to Section 11-A provided the conditions laid down in the proviso were satisfied. The two show-cause notices were finally adjudicated by the Assistant Collector Central Excise, Kharda Division, Calcutta on 11.01.1996. The assessable value determined and consequent demand was raised by finalizing assessments for the entire period July 1973 to February, 1983. If the revenue was aggrieved by the above proceedings it was incumbent upon them to either invoke the right of appeal against that order under Section 35 E (2) or issue a short levy notice under Section 11-A within six months. Neither of these two options having been invoked, the order attained finality as against the revenue.23. It need not be emphasized that there could not be two assessments for the same period.24. This apart finally determined as due for the entire period of 10 years from the assessee having been settled under the Kar Vivad Samadan Scheme, 1998, there is no scope for any further review or determination of that issue by any authority under the Act.Thus, after the grant of certificate under the Kar Vivad Samadan Scheme, 1998 as having settled the dispute and payment of the amount determined no further proceedings could be initiated or proceeded with for the period in question.28. For the reasons stated above, we do not find any substance in the appeals filed by the Revenue. Accordingly, Civil Appeal Nos. 4075-4076 of 2001 are dismissed and the order passed by the Tribunal in this respect is affirmed.In the present case there is not even an allegation much less finding by the department that there has been any clandestine removal of goods without assessment. As such the penalty is liable to be set aside. The matter having been settled in the Kar Vivad Samadan Scheme, 1998 the question of determination of the duty payable or levy of penalty did not arise.