At, High Court of Judicature at Calcutta
By, THE HONOURABLE MR. JUSTICE DEBANGSU BASAK
For the Petitioner: A.K. Raha, Aditya Dutta, Dyuti Banerjee, Advocates. For the Respondent: Somnath Ganguli, Bhaskar Prosad Banerjee, Advocates.
An order passed by the Customs and Central Excise Settlement Commission dated February 12, 2008 is under challenge in the present writ petition.
2. Learned advocate appearing for the petitioners submits that, the first petitioner is a hundred per cent export oriented unit. It is carrying on business from outside the special economic zone. It is entitled to sell certain percentage of its exports in the domestic market. In the relevant financial year, the first petitioner had done so. A proceeding under the Customs Act, 1962 was initiated against the first petitioner on the ostensible ground that the first petitioner did not have a pre-existing permission for sale in the domestic market. The first petitioner had replied to the show cause notice taking a particular stand. The first petitioner had, thereafter, approached the Settlement Commission on the basis of such stand. Learned advocate for the petitioners submits that, the stand taken by the first petitioner in the reply to the show cause notice and its approach to the Settlement Commission are erroneous appreciation of law. He submits that, the first petitioner is entitled to 100% exemption for the domestic sale and that, the two notifications which the Customs Authorities seek to rely upon for the purpose of fastening liability on the first petitioner for domestic sale has no manner of application. He submits that, the two circulars were interpreted in a similar factual scenario by different Courts and that the Courts have held in favour of the assessee. The Settlement Commission has failed to take notice of the settled position of law and had, therefore, arrived at a wrong conclusion. He submits that an opportunity be afforded to the first petitioner to re-agitate its claim before the Settlement Commission, in view of the settled position of law. That would necessarily mean the first petitioner should be allowed to recompute and to proceed afresh thereon. Learned advocate for the petitioners in support of its contention that, the first petitioner is not liable as held by the Settlement Commission relies upon 2002 (143) E.L.T. 521 (Del.) (Plastic Processors v. Union of India) and 2013 (290) E.L.T. 514 (H.P.) (Satya Metals v. Union of India).
3. Learned advocate for the department submits that, the first petitioner is liable in view of the two notifications referred to in the show cause notice. He submits that, the factual scenario in the authorities cited by the petitioners, are different to that obtaining in the present case. Therefore according to him, the ratio laid down therein, are not applicable to the facts of the present case.
4. I have considered the rival contentions of the parties and the materials made available on record.
5. The first petitioner is a hundred per cent export oriented business operating outside the Special Economic Zone. The first petitioner had caused exports for the concerned financial years. It is entitled to a corresponding domestic sale in accordance with the two notifications. The issue is whether the first petitioner should have obtained prior permission to undertake the domestic sale or not for it to receive the exemption thereunder. Apparently, Plastic Processors (supra) and Satya Metals (supra) are of the view that, prior permissions are not required.
6. The petitioner had proceeded on the basis of requirement of prior permissions in its reply to the show cause and in its approach to the Settlement Commission. The department has also proceeded on such basis. The Settlement Commission has passed the impugned order on such basis.
7. The contentions now raised by the petitioners were not raised before the Settlement Commission or in the reply to the show cause notice.
8. In such circumstances, it would be appropriate to set aside the order of the Settlement Commission impugned herein. The matter is remanded to the Settlement Commission to be decided afresh in the light of the stand presently being taken by the petitioner. The parties are at liberty to re-compute the liability of the first petitioner before the Settlement Commission. The Settlement Commission is at liberty to proceed in accordance with law in respect of the proceedings before it. This order of setting aside of the earlier order of the Set
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tlement Commission will not prevent the Settlement Commission, to arrive at the same view as passed in the impugned order, in the event it is of the opinion that, it is required to do so. The issue of applicability of the two notifications and their scope and extent are also kept open to be decided by the Settlement Commission. Needless to say, the Settlement Commission will give reasons for its order. 9. W.P. No. 608 of 2008 is disposed of. No order as to costs.