The court established that the explanation to section 32(O)(1)(i) of the Central Excise Act, 1944 was clarificatory and had retrospective effect, thus applying to the petitioner's case.

S.J. VAZIFDAR, J.

1. The petitioner has challenged an order dated 23.12.2015 passed by the Customs and Central Excise Settlement Commission dismissing its application for settlement on the ground that it is not maintainable in view of section 32(O)(1)(i) of the Central Excise Act, 1944 ( for short "the 1944 Act").

2.(A) The petitioner manufacturers mineral and aerated water which fall under Chapter-22 of the Central Excise Tariff Act, 1985. The Commissioner Central Excise, Commissionerate, Ludhiana served a notice dated 28.04.2015 calling upon the petitioner to show cause why Central Excise duty amounting to about Rs. 1.35 crores should not be recovered; Central Excise duty amounting to Rs. 30 lacs already paid be not adjusted against the said duty; central excise duty amounting to Rs. 56,251/- be not recovered and an amount of Rs. 56,251/- already deposited be not appropriated against this duty; CENVAT credit of Rs. 57,000/- be not recovered and an amount of Rs. 57,290/- already debited be not appropriated and interest be not recovered from the petitioner. For the purpose of this petition, it is necessary to note that the petitioner was also called upon to show cause why penalty should not be imposed under section 11AC of the 1944 Act and rule 15 of the CENVAT Credit Rules, 2004. The petitioner by its letter dated 25.05.2015 informed the Commissioner that it had deposited duty of about Rs. 1.35 crores along with interest and penalty @ 15% under section 11 AC(d) of the 1944 Act and requested that the proceedings pursuant to the show cause notice be concluded as per the amended section 11AC(d) of the 1944 Act.

(B) The petitioner filed an application dated 11.07.2015 under section 32E for settlement of the case in respect of the said show cause notice dated 28.04.2015. The Customs and Central Excise Settlement Commission by the impugned order dated 23.12.2015 rejected the application holding that it had no jurisdiction to entertain the application as it was barred under section 32(O)(1)(i) of the 1944 Act as a previous settlement application dated 15.04.2013 was disposed of by an order dated 31.01.2014 which besides settling of duty at about Rs. 1.82 crores imposed a penalty of Rs. 50,000/-. Sections 32 (E)(F) & (O) of the Central Excise Act, 1944 read as under:-

“Section 32E. Application for settlement of cases:-

(1) An assessee may, in respect of a case relating to him, make an application, before adjudication, to the Settlement Commission to have the case settled, in such form and in such manner as may be prescribed and containing a full and true disclosure of his duty 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, undervaluation, inapplicability of exemption notification or Cenvat credit or otherwise 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;

(c) the additional amount of duty accepted by the applicant in his application exceeds three lakh rupees;

(d) the applicant has paid the additional amount of excise duty accepted by him along with interest due under section 11AA:

Provided further that the Settlement Commission, if it is satisfied that the circumstances exist for not filing the returns referred to in clause (a) of the 1st proviso to sub-section (1), may after recording the reasons therefor, allow the application to may such application:

Provided also that no app