Full and true disclosure of duty liability is a condition precedent for invoking the jurisdiction of the Commission under Section 32E of the Central Excise Act, 1944.

1. This petition challenges order passed by the Customs and Central Excise Settlement Commission, New Delhi, rejecting application of the petitioner under Section 32E of the Central Excise Act, 1944 (for short, the Act) in respect of show cause notice dated 4-3-2004, Annexure P.2.

2. In the show cause notice, Annexure P.2, it has been alleged that on 4-10-2003, Preventive Staff visited the factory premises of the assessee and found that the assessee was taking Cenvat credit on Pig Iron, though no infrastructure for casting iron was available in the factory. The representative of the assessee in a statement stated that electric fans under brand name "LEC Concorde" were being supplied to the railways. It was admitted by Shri Ravi Bartarya, partner of the assessee that they were selling Pig Iron in the open market and were not getting any job work done. It was also found that the noticee illegally availed of Cenvat credit on Copper wire. Certain other violations were also mentioned in the notice.

3. The assessee filed a petition under Section 32E of the Act before the Commission, wherein certain violations were admitted. The commission found that the petitioner was not candid and forthright and disclosure of the liability was not full and true, which was the condition precedent for entertaining an application filed by the petitioner. It was noticed that though, the petitioner took the stand that casting was done on job work basis but failed to furnish names of the job workers. The Commission found that the petitioner was taking varying and conflicting stands.

4. Learned Counsel for the petitioner submitted that the view taken by the Settlement Commission was arbitrary and against the principles of natural justice and the Commission ought to have entertained the application. The Commission failed to notice that the fans have been supplied to the railways.

5. We have heard learned Counsel for the parties.

6. Sections 32E and F of the Act are as under :

32E. Application for settlement of cases. - (1) An assessee may, at any stage of a case relating to him make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his duty or liability which has not been disclosed before the Central Excise Officer having jurisdiction, the manner in which such liability has been derived, the additional amount of excise duty accepted to be payable by him and such other particulars as may be prescribed including the particulars of such excisable goods in respect of which he admits short levy on account of misclassification or otherwise of such excisable goods, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided : Provided that no such application shall be made unless - (a) the applicant has filed returns showing production, clearance and Central Excise duty paid in the prescribed manner;

(b) a show cause notice for recovery of duty issued by the Central Excise Officer has been received by the applicant; and

(c) the additional amount of duty accepted by the applicant in this application exceeds two lakh rupees : Provided further that application shall be entertained by the Settlement Commission under this sub-section in cases which are pending with the Appellate Tribunal or any court: Provided also that no application under this sub-section shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986).

(2) Where any excisable goods, books of account, other documents have been seized under the provisions of this Act or Rules made thereunder, the assessee shall not be entitled to make an application under Sub-section (1), before the expiry of one hundred and eighty days from the date of the seizure.

(3) Every application made under Sub-section (1) shall be accompanied by such fees as may be prescribed.

(4) An application made under Sub-sec