ACRON PHARMACEUTICALS V. UNION OF INDIA THRO SECRETARY

SCA/2694/2012

AI Insights

The case involves Acron Pharmaceuticals, a partnership firm engaged in the manufacture of patented proprietary medicines, which faced a show cause notice from the DGCEI for alleged duty evasion. The firm approached the Settlement Commission, admitting partial liability but contesting the extent of the duty demanded. The Settlement Commission's proceedings were declared abated due to non-cooperation from the DGCEI, leading to the firm's challenge against Section 32F(6) of the Central Excise Act, 1944, which mandates abatement of proceedings if a final order is not passed within nine months, extendable by three months. The court's decision focused on the constitutionality of this provision and its application in the context of the firm's case.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 680892 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 29-08-2013
• Assessment Year: misc
• Other Referred Cases: Star Television News Ltd. Versus Union of India and others, Union of India Vs. IND Swift Laboratories Ltd., Union of India and others Versus Nitdip Textile Processors Private Limited and another, R.K. Garg Vs. Union of India, P.M. Ashwathanarayana Setty Vs. State of Karnataka
• Laws Referred To: Central Excise Act, 1944
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P S CHAMPANERI; R J OZA; AMEE YAJNIK
• Assessee Lawyers: PARESH DAVE
• Keywords: Abatement of Proceedings; Article 14; Central Excise Duty; Constitutionality; Settlement commission
• Section: 11A; 11AB; 11AC; 32E; 32F(6)

Judgement Text

"C/SCA/2694/2012 CAV JUDGEMNT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 2694 of 2012 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH Sd/- and HONOURABLE MS JUSTICE SONIA GOKANI Sd/- =========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ================================================================ ACRON PHARMACEUTICALS & 1....Petitioner(s) Versus UNION OF INDIA THRO SECRETARY & 3....Respondent(s) ================================================================ Appearance: MR PARESH M DAVE, ADVOCATE for the Petitioner(s) No. 1 - 2 MR PS CHAMPANERI, ADVOCATE for the Respondent(s) No. 1 MR RJ OZA, ADVOCATE for the Respondent(s) No. 4 MS AMEE YAJNIK, ADVOCATE for the Respondent(s) No. 2 - 3 NOTICE SERVED for the Respondent(s) No. 2 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MS JUSTICE SONIA GOKANI Date : 29/08/2013 Page 1 of 38 C/SCA/2694/2012 CAV JUDGEMNT CAV JUDGEMNT (PER : HONOURABL E MR.JUSTICE M.R. SHAH) 1.00. By way of this petition under Article 226 of the Constitution of India, the petitioners have prayed for an appropriate writ, order and/or direction striking down Section 32F(6) of the Central Excise Act, 1944 (hereinafter referred to as “the Act”) thereby holding and declaring that settlement proceedings shall not abate even if the Settlement Commission did not pass within time limit specified under Section 32F(6) a final order setting the case in respect of application filed on or after the 1st day of June, 2007. The petitioners have also further prayed for an appropriate writ, order and/or direction quashing and setting aside the order No.01/Final Order/CEX/KNA/2012 made by the Settlement Commission, Bombay on 3/1/2012 thereby directing the Settlement Commission to consider and decide settlement application No.SA(E)440/2010 filed by the petitioners for settlement of case arising out of Show Cause Notice F.No.DGCEI/AZU/12(4)19/2007-08 dtd. 8/1/2010 issued by the Additional Director General, DGCEI, Zonal Unit, Ahmedabad, on merits. 2.00. That the petitioner No.1 is a Partnership Firm (hereinafter referred to as “the petitioner”). The petitioner No.2 is Partner of the petitioner No.1 firm. The petitioner firm is engaged in the business of manufacture of Patent of Proprietary medicines. That the petitioner firm was availing SSI exemption allowed by virtue of Notification No.8/2003-CE issued by the Central Government. That the respondent No.4 Page 2 of 38 C/SCA/2694/2012 CAV JUDGEMNT initiated inquiry against the petitioners in the month of July, 2007. That the petitioners were served with the show cause notice by the respondent No.4 dtd. 8/1/2010, by which the petitioners were directed to show cause as to why Central Excise Duty amounting to Rs.1,34,52,047/- towards Cenvat duty, plus education cess plus Higher Education Cess should not be demanded and recovered from them under section 11A of the Act and amount of Rs.20,00,000/- voluntarily deposited by them during the course of investigation should not be confirmed and appropriated against the aforesaid demand of duty of Rs.1,34,52,047/-, with interest at the prescribed rates should not be levied and recovered from them under the provisions of Section 11AB of the Act and penalty should not be imposed upon them under section 11AC of the Act and Rule 25 of the Central Excise Rules, 2002 for their acts and omission and commission as mentioned in the show cause notice. 2.01. That having served with the aforesaid show cause notice, the petitioners submitted appropriate application before the Settlement Commission under section 32E of the Act in the prescribed format and after complying with all requirements as provided under section 32E of the Act. That by approaching the Settlement Commission, the petitioners accepted the duty liability to the extent of Rs.51,04,783/- as against the Central Excise duty of Rs.1,34,52,047/- demanded in the show cause notice dtd. 8/1/2010. It is submitted that the said application was submitted on 18/12/2010. As per the record of the proceedings, hearing before the Settlement Commission was held on 4/5/2011. It appears that the learned advocate appearing on behalf of the petitioners submitted that they are not disputing clandestine clearance of medicaments Page 3 of 38 C/SCA/2694/2012 CAV JUDGEMNT or wrong availment of SSI benefit under Notification No.8 of 2003-CE dtd. 1/3/2003 and that their prayer before the commission is limited to the plea that the figures of clandestine clearances of medicaments and wrong availment of SSI benefit and resultant differential Central Excise duty payable as worked out by the DGCEI, as alleged in the SCN, are incorrect figures and that they need to be substantially revised and further that the benefit of Cenvat Credit on inputs/raw materials should be allowed to them. It appears that on 4/5/2011 Settlement Commission heard the learned advocate appearing on behalf of the petitioners as well as the representative for revenue i.e. Senior DGCEI, ZAU. That the Settlement Commission adjourned the matter by observing in para 4.1 to 4.3 as under : “4.1. After hearing both sides, the Bench observed that there is high degree of variation between the facts and contentions raised by both the sides. The applicants have admitted duty liability of only Rs.51,04,783/- as against the total demand of duty of Rs.1,34,52,047/- raised in the show cause notice. Thus, while the applicants have made a disclosure by admitting part of the duty liability proposed against them in the show cause notice, they have raised several complex and contentious questions of fact to contest the sustainability of balance duty liability on multiple counts. The revenue have, on the other hand, strongly emphasized upon the correctness of duty as calculated and demanded in the show cause notice, mainly stressing upon their contention that various invoices and other documents now proposed to be relied upon by the Page 4 of 38 C/SCA/2694/2012 CAV JUDGEMNT applicant in the settlement proceedings were never disclosed or produced during the course of investigations into the case. 4.2. The Bench emphasized upon both the sides that the Settlement Commission is not the appropriate forum for resolving contentious disputes involving extensive scrutiny of voluminous facts and evidence for adjudging facts which stand proved or otherwise, since the scope and object of scheme of settlement of cases as enshrined in Chapter V of the Act is settlement and not adjudication of highly disputed questions of facts. Nevertheless, the Bench appreciates that in the present case the Revenue has not outrightly rejected the applicant’s contentions as completely baseless but has questioned the veracity of applicant’s claim by arguing that facts and evidence now relied upon by the applicant were never disclosed or produced during investigation or it has prayed that the Bench may direct the applicant to produce documents supporting its claim for examination and verification by the Revenue. 4.3. In view of the above circumstances, the Bench considers it appropriate to direct both the applicant and the Revenue to carry out a joint exercise whereby the applicant shall produce and submit to Revenue within a fortnight from today all documents and records on which it proposes to rely on for substantiating its claim for recalculating the duty liability on various counts. Revenue may thereafter carry out necessary scrutiny verification and such further enquiry as deemed appropriate to affirm the Page 5 of 38 C/SCA/2694/2012 CAV JUDGEMNT correctness of the applicant’s contentions for revision of duty liability. The applicant is directed to fully co-operate with Revenue during such verification and enquiry and provide such further information and clarification on documents so produced as may be desired by Revenue. The applicant and Revenue shall both endeavour to jointly arrive at admissible reductions in duty liability on each of the various counts contended by the applicant and the revision in aggregate duty liability which may thus be called for. If, however, the Revenue finds that the claim of the applicant is not factually or evidentially tenable in relation to one or more counts, it may clearly state the grounds for rejecting the applicant’s contention in its Report to be furnished on completion of the joint exercise within a period of two months from the date of hearing. Revenue shall endorse a copy of its further Report to the applicant who may decide to make additional disclosures, if any, and seek suitable modification of its application or may file a re-joinder in response to Revenue’s Report within one week of receiving it.” 2.02. That thereafter the matter was heard by the Settlement Commission on 5/10/2011 and the matter was again adjourned on 21/10/2011 by directing the revenue to complete the exercise of verification within a period of 15 days and submit a final tabulated chart and the original applicant was also directed to extend full cooperation so that the matter gets disposed of early. It appears that thereafter in the meantime, 12 months from the date of submitting application Page 6 of 38 C/SCA/2694/2012 CAV JUDGEMNT has expired, and therefore, the Settlement Commissioner has passed the impugned order of determining proceedings as having been abated and remitting the matter to the adjudicating authority in terms of section 32F of the Act by observing that there is a non-cooperation from the office of the respondent No.4 – DGCEI, Ahmedabad. Being aggrieved by and dissatisfied with the impugned order of abatement of the proceedings passed by the Settlement Commission, petitioners have preferred present Special Civil Application challenging the vires of Section 32F(6) of the Central Excise Act, 1944. 3.00. Mr.Paresh Dave, learned advocate appearing on behalf of the petitioners has vehemently submitted that provisions of Section 32F(6) of the Central Excise Act are ultra vires the Constitution and/or violative of Article 14 of the Constitution of India. It is submitted that Section 32F(6) of the Act, which prescribes the time limit for deciding the Settlement application within a period of 9 months from the date of submitting application with a further extension to the extent of 3 months and not passing a final order by the Settlement Commission within the stipulated time mentioned in the said provision to declare the proceedings abated and remit the case to the adjudicating authority, even when the applicant is not at fault, is nothing but punishing a person for no fault of him and the same can be said to be violative of Article 14 of the Constitution of India. 3.01. Mr.Dave, learned advocate appearing on behalf of the petitioners has submitted that on true and harmonious interpretation, section ought to be read as providing for abatement only with respect of such applications wherein the Page 7 of 38 C/SCA/2694/2012 CAV JUDGEMNT applicant in any manner prevented the Settlement Commission from passing a final order within the stipulated time stated in Section 32F(6) of the Act. It is submitted that any other interpretation would result in section being struck down. It is submitted that the effect of declaring the proceedings abated as provided under Section 32F(6) of the Act would be prejudiced to the interest of the petitioners as the petitioners were induced to part with the confidential information based on the bonafide belief and legitimate expectations that the settlement order would be passed and the confidential information disclosed by the petitioners would not be made available to the authorities for use against the petitioners in assessment proceedings, penalty and other proceedings launched by the department. It is submitted that thus, the provisions which stipulates abatement of the application for no fault of the petitioners would be violative of Article 14 of the Constitution of India. 3.02. It is further submitted by Mr.Dave, learned advocate appearing on behalf of the petitioners that even the confidential material / information disclosed in strict confidence to the Commission being made available to the Assessing Officer can be used not only for making assessments but also for levying penalty and criminal prosecution. It is submitted that if the proceedings are not declared abated under Section 32F(6) of the Act, and application of the petitioners is decided and disposed of by the Settlement Commission on merits considering the material disclosed by the petitioners, in that case, even the petitioners’ case for immunity from prosecution, as provided under Section 32K of the Act, would be considered. It is submitted that, however, on Page 8 of 38 C/SCA/2694/2012 CAV JUDGEMNT declaring the proceedings abated by the Settlement Commission, considering Section 32F(6) of the Act, the Settlement Commission could not pass final order, reasons which are not attributed to the petitioners, the petitioners cannot be made to suffer. It is further submitted that even criteria for abatement as per Section 32F(6) of the Act being inability of the Commission to dispose of the application within stipulated time mentioned in the said provision, is not a valid and reasonable one in the eyes of law and suffers from vice of inoperative and violative of Article 14 of the Constitution of India. 3.03. It is further submitted by Mr.Dave, learned advocate appearing on behalf of the petitioners that in the present case as observed by the Settlement Commission, there was non- cooperation on the part of the revenue and therefore, the Settlement Commission was handicapped in passing final order within stipulated time as mentioned in Section 32F(6) of the Act and therefore, the Settlement Commission was compelled to pass an order of abatement of settlement proceedings. It is submitted that if that be so, and in such a situation to provide statutory abatement is nothing but arbitrary and violative of Article 14 of the Constitution of India and therefore, it is requested to struck down such a provision i.e. Section 32F(6) of the Act. 3.04. In the alternative, Mr.Dave, learned advocate appearing on behalf of the petitioners has requested to read down the provision in such a manner and while upholding the constitutionality of Section 32F(6) of the Act. Page 9 of 38 C/SCA/2694/2012 CAV JUDGEMNT 3.05. Mr.Dave, learned advocate appearing on behalf of the petitioners has requested to read down the aforesaid provision to the extent declaring the settlement proceedings abated in case, the Settlement Commissioner is unable to pass final order within stipulated time stated in the said provision due to the reasons attributable to the assessee. It is submitted that in other words, the aforesaid provision is required to be read in such a harmonious manner that the Settlement Commission must fulfill its mandatory / statutory duty in disposing of such application as referred to in Section 32F(6) of the Act within the time specified in Section 32F(6) of the Act except where prevented from doing so due to any reasons attributable on the part of the applicant. In support of his above submissions, Mr.Dave, learned advocate appearing on behalf of the petitioners has heavily relied upon the decision of the Bombay High Court in the case of Star Television News Ltd. Versus Union of India and others, reported in [2009] 317 ITR 66 (Bombay). Relying upon above decision, it is submitted that considering para-materia provisions in Income Tax Act i.e. Section 245D(4A) of the Income Tax Act, Bombay High Court while upholding the constitutionality of the said provision has read down the aforesaid provision to mean that the proceedings declared as having been abated would be where failure owing to reasons attributed to the applicant. It is submitted that by reading down the aforesaid provision, the Bombay High Court has directed the Settlement Commission to proceed with the application as is not abated where delay is not attributable to the applicant. By relying upon the aforesaid decision of the Bombay High Court, it is requested to read down the similar provision in the Central Excise Act i.e. Section 32F(6) of the Act so that the proceedings under Page 10 of 38 C/SCA/2694/2012 CAV JUDGEMNT Section 32F(6) of the Act are abated only where the failure owing to reasons attributable to the applicant, meaning thereby the failure on the part of the Settlement Commissioner in not passing final order within stipulated time prescribed under Section 32F(6) of the Act are attributable to revenue and/or failure is not owing to reasons attributable to the applicants. By making above submissions and relying upon above decision, it is requested to declare Section 32F(6) of the Act as unconstitutional and in the alternative to read down Section 32F(6) of the Act as submitted hereinabove. 4.00. Present petition is opposed by Mr.P.S. Champaneri, learned Assistant Solicitor General of India appearing on behalf of the Union of India, Mr.R.J. Oza, learned counsel appearing on behalf of the respondent No.4 and Dr.Amee Yajnik, learned counsel appearing on behalf of the respondent No.3. 5.00. The learned counsel appearing on behalf of the respondents have vehemently submitted that on the grounds submitted on behalf of the petitioners, Section 32F(6) of the Act cannot be declared ultra vires and/or unconstitutional. It is submitted that earlier there was no specific time limit provided in Chapter-V and in providing applications by the Settlement Commission. It is submitted that looking to the object and purpose of introduction of Chapter-V giving opportunity to the assessee to approach the Settlement Commission for settlement of the cases i.e. for speedy disposal of the case and to save the time which was being consumed in Page 11 of 38 C/SCA/2694/2012 CAV JUDGEMNT adjudication proceedings when there is amendment in Chapter-V more particularly in Section 32F(6) of the Act, under which not the limit is prescribed, it cannot be said that such a provision is arbitrary and/or violative of Constitution and/or unconstitutional. It is further submitted that as such Chapter-V is a complete code in itself. It is submitted that at every stage safeguards are provided to minimize the delay and/or to avoid the delay. It is submitted that now under the amended provision, it is also provided that if the Commission and/or Commissioner Vigilance is not cooperated, it will be open for the Settlement Commission to proceed further with the proceedings and to pass an appropriate final order. It is submitted that now as per the amended provisions of Section 32F of the Act, as per sub-section (1) on receipt of an application, Settlement Commissioner shall, within 7 days from the date of receipt of the application, issue a notice to the applicant to explain in writing as to why the application made should be allowed to be proceeded with and after taking into consideration the explanation provided by the applicant, the Settlement Commissioner, shall, within a period of 14 days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application, as the case may be. It is submitted that where no notice has been issued or no order has been passed within the aforesaid period by the Settlement Commissioner, application shall be deemed to have been allowed to be proceeded with. It is further submitted that as per sub-section (2) of Section 32F(6) of the Act, copy of every under sub-section (1), shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. It is submitted that sub-section (3) of Section 32F(6) of the Act further provides that where an application is Page 12 of 38 C/SCA/2694/2012 CAV JUDGEMNT allowed or deemed to have been allowed to be proceeded with under sub-section (1), the Settlement Commissioner, shall within 7 days from the date of order under sub-section (1), call for a report along with the relevant records from the Commissioner of Central Excise having jurisdiction and it further provides that the Commissioner shall furnish the report within 30 days of the receipt of communication from the Settlement Commissioner. It is submitted that proviso to sub- section (3) further provides that where the Commissioner does not furnish the report within the aforesaid period of 30 days, the Settlement Commissioner shall proceed further in the matter without the report of the Commissioner. It is further submitted that sub-section (4) of Section 32F(6) of the Act further provides that where a report of the Commissioner is called for under sub-section (3) has been furnished within the period specified in that sub-section, the Settlement Commissioner may, after examination of such report, if it is of the view that any further inquiry or investigation in the matter is necessary direct, for the reasons to be recorded in writing, the Commissioner (Investigation) within 15 days of the receipt of the report of the Commissioner, to make or cause to be made such further inquiry or investigation and furnish a report within 90 days of the receipt of the communication from the Settlement Commissioner, on the matters covered by the application and any other matter relating to the cases. It is further submitted that proviso to sub-section (4) of Section 32F(6) of the Act further provides that where the Commissioner (Investigation) does not furnish the report within the aforesaid period, the Settlement Commissioner shall proceed to pass an order under sub-section (5) without such report. It is submitted that, therefore, at every stage wherever Page 13 of 38 C/SCA/2694/2012 CAV JUDGEMNT the time limit is provided, the consequences of not submitting the report by the Commissioner or Commissioner (Investigation) is provided and in case of non-cooperation by the Commissioner and/or Commissioner (Investigation), the Settlement Commissioner is empowered to proceed further in the matter without the report of the Commissioner and/or the report of the Commissioner (Investigation), as the case may be. It is further submitted that, therefore, in such a situation, Settlement Commissioner is not helpless and in case it is found that there is a non-cooperation on the part of the Commissioner or the Commissioner (Investigation), as the case may be, still the Settlement Commissioner can proceed further with the matter and pass a final order on the basis of the material on record. It is further submitted that even the extension of further period of 3 months as provided in proviso to sub-section (6) is required to be made applicable in such a situation. Whenever 9 months are over and/or likely to be over and Commissioner is of the opinion that it could not finally dispose of the matter within 9 months due to the reasons which are either attributable to the applicant and/or the Commissioner, it may proceed further with the matter, considering proviso to sub-section (3) and proviso to sub- section (4) of Section 32F(6) of the Act and pass a final order within further period of three months. It is submitted that, therefore, when the aforesaid safeguards are taken while providing and/or stipulating the regulation, such a provision cannot be said to be unconstitutional. It is submitted that such an amendment in the Act and stipulation of the time limit is with a view to see that the settlement proceedings are completed at the earliest within the stipulated time and therefore, the purpose and object of settling the dispute of Page 14 of 38 C/SCA/2694/2012 CAV JUDGEMNT approaching the Settlement Commissioner is fulfilled and achieved. Relying upon the following decisions of the Hon'ble Supreme Court, it is requested to uphold the constitutionality of Section 32F(6) of the Act : (1) 2011 (265) ELT 3 (S.C.) (Union of India Vs. IND Swift Laboratories Ltd.) (2) (2012) 1 SCC 226 (Union of India and others Versus Nitdip Textile Processors Private Limited and another) (3) (1981) 4 SCC 675 (R.K. Garg Vs. Union of India) (4) 1989 Supplementary (1) SCC 79 (P.M. Ashwathanarayana Setty Vs. State of Karnataka) 5.01. Now, so far as reliance placed upon the decision of the Bombay High Court in the case of Star Television News Ltd. (supra) is concerned, it is submitted by Dr.Yajnik that the said decision would not be applicable to the facts of the present case. It is submitted that in the case before the Bombay High Court, the High Court was considering the cut off date of 31st March, 2008 for Settlement Commission to complete the proceedings by virtue of 245D(4A) of the Income Tax Act,1961. It is submitted that on facts and considering the material on record it was found that it was the duty imposed upon the Settlement Commissioner to dispose of the complete proceedings on or before 31/3/2008 and therefore, it was found that fixing of such an cut off date is arbitrary and violative of Article 14 of the Constitution of India, the Bombay High Court had read down the said provision. It is submitted that even the provisions of the Income Tax Act and the provisions of the Central Excise Act are different. It is Page 15 of 38 C/SCA/2694/2012 CAV JUDGEMNT submitted that, therefore, even there is no question of reading down Section 32F(6) of the Central Excise Act as alternatively contended on behalf of the petitioners. Relying upon the decision of the Hon'ble Supreme Court in the case of Union of India Vs. IND Swift Laboratories Ltd., reported in 2011 (265) ELT 3 (S.C.), it is submitted by the learned counsel appearing on behalf of the respondents that as observed by the Hon'ble Supreme Court in the grab of reading down a provision, it is not open to read words and expressions not found in the provision / statute and thus venture into a kind of judicial legislation. It is submitted that Rule of reading down is to be used for limited purpose of making a particular provision workable and to bring in harmonious with other provisions of statute and that too in a case where it is found that a particular provision is unconstitutional or illegal. It is submitted that a statutory provision is generally read down in order to save such provision from being declared unconstitutional or illegal. It is submitted that in the present case Section 32F(6) of the Act is neither illegal nor arbitrary and therefore, there is no question of further reading down it. 5.02. Mr.R.J. Oza, learned counsel appearing on behalf of the respondent No.4 has further submitted that application before the Settlement Commissioner by the petitioners is voluntary and even any disclosure of any material would also be voluntary. It is submitted that as such the applicant who declared such other material which otherwise would be in his possession and/or within his knowledge. It is submitted that only with a view to avoid further liability of penalty interest and/or prosecution, applicant would be approaching the Settlement Commissioner with materials in his possession to Page 16 of 38 C/SCA/2694/2012 CAV JUDGEMNT substantiate his demand of duty liability for which show cause notice has been issued. It is submitted that, therefore, merely because the applicants have disclosed certain material and subsequently for any reasons the proceedings are declared abated and the matter remitted to the adjudicating authority, thereafter he cannot make any grievance that as he has disclosed material along with the settlement application, which is subsequently known to the Assessing Officer, which after abatement can be used against him. It is submitted that on the aforesaid ground Section 32F(6) of the Act cannot be declared ultra vires and/or unconstitutional. 5.03. It is further submitted by Mr.R.J. Oza, learned counsel appearing on behalf of the respondent No.4 that as such the observations made by the Settlement Commission in the impugned order that there was non-cooperation by the respondent No.4 is factually incorrect. It is submitted that all throughout the respondent No.4 and/or representative appeared before the Settlement Commissioner and made submissions. However, there was an insistence for granting SSI exemption under the Notification No.8/2003-CE which the petitioners are not entitled, which is considered to be non- cooperation by the Settlement Commission. In support of his above submission, he has relied upon the Affidavit-in-reply filed on behalf of the respondent No.4. 5.04. Mr.Champaneri, learned Assistant Solicitor General of India has further submitted that settlement of case is an alternative dispute resolution mechanism that has incorporated in the statute to expedite the disputes with the willing taxpayers quickly. It is submitted that, therefore, it is Page 17 of 38 C/SCA/2694/2012 CAV JUDGEMNT conscious policy decision that the dispute before the Settlement Commission settled in a time bound manner. It is submitted that the period of 9 months, further extendable by another 3 months, is a reasonable time for settlement of dispute upon full and true disclosure of duty liability by the taxpayer before the Commission. It is submitted that as such the Commission provides an additional forum to taxpayer for settlement of dispute. It is submitted that prescribing a time limit for settlement of dispute by the Settlement Commission is a provision that is favourable to the taxpayer seeking settlement of dispute upon full and true disclosure of his liability. It is submitted that it is not comprehensible as to how such a provision could violate fundamental right of a taxpayer. It is submitted that on the contrary, the objective of entire Scheme is to provide an expeditious resolution to disputes outside the judicial mechanism that is already available under the other provisions of the Act. It is submitted that if the proceedings for settlement of disputes are allowed to go on indefinitely, the very objective of the Scheme get defeated and therefore, such reasonable restriction is necessary for achieving the very objective of Scheme. It is submitted that, therefore, provisions of Section 32F(6) of the Act prescribing limitation of total 1 year for disposal of case for settlement is just and equitous. 5.05. Similarly, Dr.Yagnik, learned counsel appearing on behalf of the respondent No.3 has also submitted that there was full cooperation by the office of the respondent No.3 before the Settlement Commission and as and when asked for, the authorized representative has appeared and submitted the report which was considered by the Settlement Commission. Page 18 of 38 C/SCA/2694/2012 CAV JUDGEMNT Dr.Yajnik, learned counsel appearing on behalf of the respondent No.3 has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Union of India and others Versus Nitdip Textile Processors Private Limited and another, reported in (2012) 1 SCC 226 in support of her submission not to declare Section 32F(6) of the Act as unconstitutional. By making above submissions, it is requested to dismiss the present petition. 6.00. Heard the learned advocates appearing on behalf of the respective parties at length. 7.00. At the outset, it is required to be noted that in the present petition the petitioners have prayed for an appropriate writ, order and/or direction striking down Section 32F(6) of the Central Excise Act, 1944 which provides abatement of the proceedings in case the Settlement Commission does not pass a final order within time limit specified under Section 32F(6) setting the case in respect of the application filed on or after the 1st day of June, 2007. 7.01. To consider the aforesaid provision of law original and after amendment and its object and purpose is required to be considered. 7.02. It appears that the object and purpose of approaching the assessee before the Settlement Commission is to minimize the litigation and to realize the arrears of tax by way of settlement in an expeditious manner. The basic Page 19 of 38 C/SCA/2694/2012 CAV JUDGEMNT objective of setting up of the Settlement Commission is to expedite the payments of customs and excise duties involved in disputes by avoiding costly and time consuming litigation process and to give an opportunity to taxpayers to come clean who may have evaded payments of duty. It provides a forum for the assessees to apply for settlement of their cases on the basis of true and complete disclosure of their duty liability by them under Chapter-V of the Central Excise Act. The Settlement Commission is therefore set up as an independent body, manned by experienced tax officers of “integrity and outstanding ability” capable of inspiring confidence in Trade and Industry and entrusted with the responsibility of defining and safeguarding “revenue interest”. Thus, the main object and purpose of setting up of the Settlement Commission is to expedite the payments of excise duties involved in disputes and to give an opportunity to the assessee who may have avoided payment of duties and by approaching Settlement Commission and payment of duty which was evaded on the basis of true and complete disclosure of their duty liability, the assessee may get benefit of immunity from prosecution. 7.3. In backdrop of above object and purpose of constituting the Settlement Commission and providing for settlement of the dispute by way of approaching the Settlement Commission, earlier section 32F and the amended Section 32F substituted by Finance Act of 2007 (Act No.22 of 2007) are required to be considered. Section 32F prior to substitution by Finance Act of 2007 (Act No.22 of 2007) reads as under : “(1) On receipt of an application under sub- section (1) of section 32E, the Settlement Commissioner shall call for a report from the Page 20 of 38 C/SCA/2694/2012 CAV JUDGEMNT Commissioner of Central Excise having jurisdiction and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may, by order, allow the application to be proceeded with or reject the application: Provided that an application shall not be rejected under this sub-section, unless an opportunity has been given to the applicant of being heard: Provided further that the Commissioner of Central Excise shall furnish such report within a period of one month of the receipt of the communication from the Settlement Commission, failing which it shall be presumed that the Commissioner of Central Excise has no objection to such application; but he may raise objections at the time of hearing fixed by the Settlement Commission for admission of the application and the date of such hearing shall be communicated by the Settlement Commission to the applicant and the Commissioner of Central Excise within a period not exceeding two months from the date of receipt of such application, unless the presiding officer of the Bench extends the time, recording the reasons in writing. (2) A copy of every order under sub-section (1) shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. (3) Subject to the provisions of sub-section (4), the applicant shall within thirty days of the receipt of a copy of the order under sub-section (1) allowing the application to be proceeded with, pay the amount of additional duty admitted by him as payable and shall furnish proof of such payment to the Settlement Commission. (4) If the Settlement Commission is satisfied, on an application made in this behalf by the assessee that he is unable for good and sufficient reasons to pay the amount referred to in sub- section (3), within the time specified in that sub- section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by installments, if the assessee Page 21 of 38 C/SCA/2694/2012 CAV JUDGEMNT furnishes adequate security for the payment thereof. (5) Where the additional amount of duty referred to in sub-section (3) is not paid by the assessee within the time specified or extended period, as the case may be, the Settlement Commission may direct that the amount which remains unpaid, together with simple interest at the rate of eighteen per cent per annum or at the rate notified by the Central Board of Excise and Customs from time to time on the amount remaining unpaid, to be recovered, as the sum due to Central Government by the Central Excise Officer having jurisdiction over the assessee in accordance with the provisions of section 11. (6) Where an application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner of Central Excise having jurisdiction and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner (Investigation) to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case. (7) After examination of the records and the report of the Commissioner of Central Excise received under sub-section (1), and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under sub-section (6), and after giving an opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard, either in person or through a representative duly authorized in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub-section (1) or sub-section (6). (8) Subject to the provisions of section 32A, the materials brought on record before the Settlement Commission shall be considered by Page 22 of 38 C/SCA/2694/2012 CAV JUDGEMNT the Members of the Bench concerned before passing any order under sub-section (7) and, in relation to the passing of such order, the provisions of section 32D shall apply. (9) Every order passed under sub-section (7) shall provide for terms of settlement including any demand by way of duty, penalty or interest, the manner in which any sums due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commissioner that it has been obtained by fraud, or misrepresentation. (10) Where any duty payable in pursuance of an order under sub-section (7) is not paid by the assessee within thirty days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such duty or has allowed payment thereof by installations, the assessee shall be liable to pay simple interest at the rate eighteen per cent per annum or at such other rate as notified by the Central Board of Excise and Customs on the amount remaining unpaid from the date of expiry of the period of thirty days aforesaid. (11) Where a settlement become void as provided under sub-section (9) the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Central Excise Officer having jurisdiction may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the date of the receipt of communication that the settlement becomes void.” 7.04. Section 32F of the Central Excise Act substituted by Finance Act of 2007 reads as under :- “(1) On receipt of an application under sub- section (1) of section 32E, the Settlement Commissioner shall, within seven days from the Page 23 of 38 C/SCA/2694/2012 CAV JUDGEMNT date of receipt of the application, issue a notice to the applicant, to explain in writing as to why the application made by him should be allowed to be proceeded with, and after taking into consideration the explanation provided by the applicant, the Settlement Commissioner, shall, within a period of fourteen days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application as the case may be, and the proceedings before the Settlement Commissioner shall abate on the date of rejection. Provided that where no notice has been issued or no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with. (2) A copy of every order under sub-section (1), shall be sent to the applicant and to the Commissioner of Central Excise having jurisdiction. (3) Where an application is allowed or deemed to have been allowed to be proceeded with under sub-section (1), the Settlement Commissioner shall, within seven days from the date of order under sub-section (1) call for a report along with the relevant records from the Commissioner of Central Excise having jurisdiction and the Commissioner shall furnish the report within a period of thirty days of the receipt of the communication from the Settlement Commission: Provided that where the Commissioner does not furnish the report within the aforesaid period of thirty days, the Settlement Commission shall proceed further in the matter without the report of the Commissioner. (4) Where a report of the Commissioner called for under sub-section (3) has been furnished within the period specified in that sub-section, the Settlement Commission may, after examination of such report, if it is of the opinion that any further enquiry or investigation in the matter is necessary direct, for reasons to be recorded in writing, the Commissioner (Investigation) within fifteen days of the receipt of the report, to make or cause to be made such further enquiry or investigation and furnish a Page 24 of 38 C/SCA/2694/2012 CAV JUDGEMNT report within a period of ninety days of the receipt of the communication from the Settlement Commission, on the matters covered by the application and any other matter relating to the case: Provided that where the Commissioner (Investigation) does not furnish the report within the aforesaid period, the Settlement Commission shall proceed to pass an order under sub-section (5) without such report. (5) After examination of the records and the report of the Commissioner of Central Excise received under sub-section (3) and the report, if any, of the Commissioner (Investigation) of the Settlement Commissioner under sub-section (4), and after giving an opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub-section (3) or sub-section (4). (6) An order under sub-section (5) shall not be passed in respect of an application filed on or before the 31st day of May, 2007, later than the 29th day of February, 2008 and in respect of an application made on or after the 1st day of June, 2007, after nine months in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 32E had been made. [Provided that the period specified under this sub-section may, for reasons to be recorded in writing, be extended by the Settlement Commission for a further period not exceeding three months] [inserted by Finance Act, 2010 dated 08.05.2010]. (7) Subject to the provisions of section 32A, the Page 25 of 38 C/SCA/2694/2012 CAV JUDGEMNT materials brought on record before the Settlement Commissioner shall be considered by the Members of the concerned Bench before passing any order under sub-section (5) and, in relation to the passing of such order, the provisions of section 32D shall apply. (8) The order passed under sub-section (5) shall provide for the terms of settlement including any demand by way of duty, penalty or interest, the manner in which any sums due under the settlement shall be paid and all other matters to make the settlement effective and in case of rejection contain the reasons therefor and it shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud, or misrepresentation of facts: Provided that the amount of settlement recorded by the Settlement Commission shall not be less than the duty liability admitted by the applicant under section 32E. (9) Where any duty, interest, fine and penalty payable in pursuance of an order under sub- section (5), is not paid by the assessee within thirty days of a copy of the order by him, the amount which remains unpaid, shall be recovered along with interest due thereon, as the sums due to the Central Government by the Central Excise Officer having jurisdiction over the assessee in accordance with the provisions of section 11. (10) Where a settlement become void as provided under sub-section (8), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Central Excise Officer having jurisdiction may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the date of the receipt of communication that the settlement becomes void.” 7.05. As can be seen from the aforesaid provision of law, prior to its substitution by the Finance Act, 2007 (Act No.22 of 2007) and as Section 32F stood, there was no mandatory time Page 26 of 38 C/SCA/2694/2012 CAV JUDGEMNT limit for the Settlement Commission to dispose of the application. It also did not provide any time limit for the Commission of Central Excise having jurisdiction to submit any report on the further inquiry or investigation or any report or any time limit prescribed for submitting the report on further inquiry or investigation by the Commission (Investigation). Now, after Section 32F of the Central Excise Act is substituted by the Finance Act of 2007 (Act No.22 of 2007) w.e.f. 1/6/2007 as in force on the date, at every stage time limit is prescribed. As per Sub-section (1) of Section 32F (as substituted), on receipt of an application under Sub-section (1) of Section 32F, Settlement Commission shall within 7 days from the date of receipt of the application issue a notice to the applicant to explain in writing as to why the application made by him should be allowed to be proceeded with. It also further provides that after taking into consideration of explanation provided by the applicant, the Settlement Commission shall within a period of 14 days from the date of the notice, by an order allow the application to be proceeded with or reject the application, as the case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection. Sub-section (1) of Section 32F further provides that where no notice is issued or no order has been passed within the aforesaid period by the Settlement Commission, application shall be deemed to have been allowed to be proceeded with. Sub-section (3) of Section 32F(6) of the Act further provides that where an application is allowed or deemed to have been allowed to be proceeded with under sub- section (1), the Settlement Commissioner, shall within 7 days from the date of order under sub-section (1), call for a report along with the relevant records from the Commissioner of Page 27 of 38 C/SCA/2694/2012 CAV JUDGEMNT Central Excise having jurisdiction and it further provides that the Commissioner shall furnish the report within 30 days of the receipt of communication from the Settlement Commissioner. It further provides that where the Commissioner does not furnish the report within the aforesaid period of 30 days, the Settlement Commissioner shall proceed further in the matter without the report of the Commissioner. Sub-section (4) of Section 32F(6) of the Act further provides that where a report of the Commissioner is called for under sub-section (3) has been furnished within the period specified in that sub-section, the Settlement Commissioner may, after examination of such report, if it is of the opinion that any further inquiry or investigation in the matter is necessary, direct, the Commissioner (Investigation) within 15 days of the receipt of the report of the Commissioner, to make or cause to be made such further inquiry or investigation and in that case, the Commissioner (Investigation) is required to furnish a report within a period of 90 days of the receipt of the communication from the Settlement Commissioner, on the matters covered by the application and any other matter relating to the cases. It further provides that where the Commissioner (Investigation) does not furnish the report within the aforesaid period, the Settlement Commissioner shall proceed to pass an order under Sub-section (5) without such report. Sub-section (5) of Section 32F provides that after examination of the records and report of the Commissioner of Central Excise received under Sub- section (3) and report if any of the Commissioner (Investigation) of the Settlement Commission under Sub- section (4) and after giving opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard and after examining further evidence that may be Page 28 of 38 C/SCA/2694/2012 CAV JUDGEMNT placed before it, the Settlement Commissioner to pass such order as thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under Sub- section (3) or Sub-section (4). Sub-section (6) of Section 32F provides that an order under Sub-section (5) shall not be passed in respect of an application made on or after 1st day of June, 2009, after nine months from the day of the month in which the application was made and failing which the settlement proceedings shall abate and the adjudicating authority before whom the proceedings at the time of making application was pending, shall dispose of the case in accordance with the provisions of Central Excise Act as if no application under Section 32 had been made. Proviso to Sub- Section (6) of Section 32F further provides that the period specified under Sub-section (6) of Section 32F may, for the reasons to be recorded in writing, be extended by the Settlement Commission for a further period not exceeding three months (inserted by Finance Act No.10 dtd. 8/5/2010). 7.06. Thus, now, as per substituted Section 32F at every stage time limit is prescribed so as to achieve object and purpose of speedy recovery of duties and by way of settlement. It also further provides deeming provision and permits the Settlement Commission to proceed further in the matter in case it has been found that either the Commissioner of Central Excise having jurisdiction or the Commissioner (Investigation) do not furnish the report as per Sub-sections (3) and (4) within stipulated time provided in Sub-sections (3) and (4). Thus, as such the scheme has provided in Sections 32(A) Page 29 of 38 C/SCA/2694/2012 CAV JUDGEMNT to (F) of the Central Excise Act is a code in itself. The aforesaid time limit is prescribed in Section 32F to expedite the dispute with the willing taxpayers quickly and expeditious recovery of duties. Therefore, it is a conscious policy decision that the dispute before the Settlement Commissioner to be completed in a time bound programme. Prescribing time limit for settlement of dispute by the Settlement Commissioner is thus a provision favourable to taxpayers seeking settlement of dispute upon full and true disclosure of its liabilities. Settlement of case is an alternative dispute resolution mechanism with the object and purpose as stated above. The objective of entire scheme is to approach the Settlement Commissioner and to resolve the dispute is to provide expeditious resolution of dispute outside the judicial mechanism that is already available under the other provisions of the Act. Therefore, if the proceedings for settlement of disputes are allowed to go on indefinitely, the very objective of the Scheme would be defeated and/or frustrated. Therefore, under substituted Section 32F(6) of the Central Excise Act, when the period of nine months further extendable by another three months is provided by the Settlement Commission to pass a final order, the same cannot be said to be arbitrary, unreasonable and/or violative of Article 14 of the Constitution of India. Period of nine months further extendable by another three months, is a reasonable time for settlement of dispute upon full and true disclosure of the duty liability by the taxpayer before the Commission. Therefore, the provisions of Section 32F(6) of the Central Excise Act, 1944 prescribing total one year for disposal of the case in settlement is just and equitous. Page 30 of 38 C/SCA/2694/2012 CAV JUDGEMNT 7.07. Now, so far as the contention on behalf of the petitioners that if the Settlement Commission would not pass final order within the period specified under Section 32F(6) of the Act for the reasons which are not attributable to the applicant and the proceedings are required to be declared abated and therefore, the applicant who is not at all found responsible for not passing final order by the Settlement Commission within the specified time should not be made to suffer and therefore, to that extent Section 32F(6) which provides that if the Settlement Commission does not pass final order within a period of nine months and/or within extended period of three months, the proceedings shall stand abated, is unreasonable and violative of Article 14 of the Constitution of India, is concerned, the aforesaid seems to be attractive but has no substance. It is required to be noted and as discussed hereinabove, at every stage whenever the time limit is prescribed, there are further safeguards provided right from Section 32F(1) to Section 32F(6). As stated above, if the Settlement Commission does not issue any notice as provided under Section 32F(1) and/or does not pass any order as required under section 32F(1) of the Act, there is a deeming provision and application shall be deemed to have been allowed to be proceeded with. Sub-sections (3) and (4) of Section 32F provides that if within stipulated time mentioned in Sub-sections (3) and (4) of Section 32F, if the Commission of Central Excise having jurisdiction and/or Commissioner (Investigation) do not furnish the report within the stipulated time mentioned in the said provision, it confers powers upon the Settlement Commission to proceed further in the matter without the report of the Commissioner. As stated above, the period of nine months further extendable by another three Page 31 of 38 C/SCA/2694/2012 CAV JUDGEMNT months cannot be said to be unreasonable and/or arbitrary. As such, considering Sub-section (6) of Section 32F, Settlement Commissioner is required to pass final order within a period of nine months from the last date of the month in which the application has been made. Therefore, at the end of the nine month, if Settlement Commission has not passed any final order and the proceedings are required to be abated, in that case, the applicant can certainly move an application before the Settlement Commission and point out that they are not responsible for any delay and that they had fully cooperated and still the proceedings are required to be abated and in such a situation, the Settlement Commission is empowered to extend the period for a further period of three months and within the extended period of three months, the Settlement Commission is required to pass a final order. Considering the aforesaid prescription or time limit at every stage and even safeguards provided, it cannot be said that Section 32F(6) of the Act is unreasonable and/or arbitrary and/or violative of Article 14 of the Constitution of India. 7.08. In the case of R.K. Garg Vs. Union of India, reported in (1981) 4 SCC 675, in paras 7 and 8 the Hon'ble Supreme Court has observed and held as under : “7. Now while considering the constitutionality validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well-established principles which have been evolved by the courts as rule of guidance in discharge of its constitutional function of judicial review. The Page 32 of 38 C/SCA/2694/2012 CAV JUDGEMNT first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the need of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the items and may assume every state of facts which can be conceived existing at the time of legislation. 8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or straitjacket formula and this is particularly rule in case of legislation dealing with Page 33 of 38 C/SCA/2694/2012 CAV JUDGEMNT economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The Court should feel more inclined to give judicial deference to legislative judgement in the field of economic regulation than in other areas where fundamental human rights are involved.” 7.09. In the case of P.M. Ashwathanarayana Setty Vs. State of Karnataka, reported in 1989 Supplementary (1) SCC 79, the Hon'ble Supreme Court has observed and held as under : “79. .... The State enjoys the widest latitude where measures of economic regulation are concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting social and economic values and interests. It is for the State to decide what economic and social policy it should pursue and what discriminations advance those social economic policies.” 7.10. Considering the aforesaid decisions of the Hon'ble Supreme Court and object and purpose of Section 32E and 32F of the Act and object and purpose of Settlement of Cases by approaching Settlement Commission and in prescribing time limit under which the Settlement Commission is required to pass final order failing which the proceedings shall stand abated, is neither unreasonable nor violative of Article 14 of Page 34 of 38 C/SCA/2694/2012 CAV JUDGEMNT the Constitution of India. 7.11. Now, so far as the contention on behalf of the petitioners that the petitioners while submitting the application before the Settlement Commission is required to disclose all material which are within exclusive knowledge of the assessee and is required to make full and true disclosure and therefore, if considering Section 32F(6) of the Act despite the reasons which are not attributable to the applicant, the Settlement Commission did not pass any final order within the stipulated time prescribed under Section 32F(6) of the Act and the proceedings are declared abated and the proceedings before the adjudicating officer shall have to go on and the material which has been disclosed by the applicant can be used against the applicant and therefore, such a provision would be unreasonable, is concerned, it is required to be noted that as such to approach the Settlement Commission as per Section 32E and 32F of the Act is not mandatory. Only those assessee who have avoided payment of duty and want to avoid further litigation and desirous of immunity from prosecution etc. may approach the Settlement Commission with clean hands and on true and complete disclosure of their duty liability. It is required to be noted that as such even otherwise, any assessee is required to make true and complete disclosure of their duty liability. As such and as per the provisions of Section 32F, an assessee who has been served with the show cause notice by the adjudicating officer can approach the Settlement Commissioner accepting his duty liability under the Act on making true and complete disclosure. Under the circumstances, on the aforesaid ground the provisions of Section 32F(6) of the Act to the extent it provides that in case Page 35 of 38 C/SCA/2694/2012 CAV JUDGEMNT Settlement Commission does not pass final order within the period stipulated in the said provision, proceeding shall stand abated, cannot be declared ultra vires the Article 14 of the Constitution of India. 7.12. Now, so far as the reliance placed upon the decision of the Bombay High Court in the case of Star Television News Ltd. (supra) and to read down the provisions of section 32F(6) of the Central Excise Act as read down by the Bombay High Court in the said decision is concerned, at the outset, it is required to be noted that on that facts and considering the provisions of Section 32F(6) of the Act, the said decision would not be applicable. In the case before the Bombay High Court what was challenged was challenge under Section 245D(4A) of the Income Tax Act, as substituted by the Finance Act of 2007 in respect of an application for settlement filed before the Settlement Commission before June 1, 2007, under which a mandatory / statutory duty was cast on the Settlement Commission to pass a final settlement order under Section 245D(4A) of the Income Tax Act, on or before March 31, 2008 failing which the application would abate. In the said case, it was demonstrated that it was not possible at all for the Settlement Commission to decide and finally dispose of the application for settlement on or before March 31, 2008. Considering the aforesaid controversy while upholding the constitutionality of Section 245D(4A) of the Income Tax Act, as substituted by the Finance Act of 2007, Bombay High Court has read down the said provision that Section 245HA(1)(iv) to mean that in the event the application could not be disposed of for any reason attributable on the part of the applicant who has made an application under Section 245(C) and Page 36 of 38 C/SCA/2694/2012 CAV JUDGEMNT consequently only such proceedings would abate under Section 245HA(1)(iv). Therefore, as such on facts and considering the material on record the Bombay High Court arrived at the conclusion that fixing of cut off date as March 31, 2008 was arbitrary and provisions of Section 245HA(1)(iv) to that extent will be also arbitrary and consequently unconstitutional. In the present case, we are concerned with the application for settlement made on or after 1st day of June, 2007. 7.13. Now, so far as the submission of Mr.Dave, learned advocate appearing on behalf of the petitioners to read down Section 32F(6) in the same manner as read down by the Bombay High Court is concerned, it is required to be noted and as per the settled proposition of law, the provision of law is required to be read down either to uphold its constitutionality and so as to achieve the object and purpose and/or when there is some ambiguity in the provision. In the present case, as stated hereinabove, Section 32F(6) of the Act to the extent it provides abatement of the proceedings in case the Settlement Commission does not pass final order within the time prescribed in the said provision is a complete code with all necessary safeguards and to achieve the object and purpose of speedy disposal of cases and speedy recovery of duties and which is held to be neither unreasonable nor arbitrary and/or violative of Article 14 of the Constitution of India. There is no need to further read down the said provision. There is no ambiguity at all for which the aforesaid provision is required to be read down. 8.00. In view of the above and for the reasons stated Page 37 of 38 C/SCA/2694/2012 CAV JUDGEMNT above, challenge to Section 32F(6) of the Act which provides abatement of proceedings in case the Settlement Commissioner does not pass a final order within a period of nine months and/or within extended further period of three months, fails and the present petition deserves to be dismissed and is accordingly dismissed. Rule is discharged. In the facts and circumstances of the case, there shall be no order as to costs. Sd/- (M.R.SHAH, J.) Sd/- (MS SONIA GOKANI, J.) rafik. Page 38 of 38 "