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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2576 OF 2009 (Arising out of SLP(C) No.6486 of 2008)

M/S JAI JAGDAMBA MALLEABLE (P) LTD. ...APPELLANT (S)

VERSUS

UNION OF INDIA & OTHERS. ...RESPONDENT(S)

O R D E R

Leave granted.

In this  case at the time of  the assessee's application coming up for admission  

before the Settlement Commission, the following order was passed:

“On examining the submissions made by both sides,  we find  that  the applicant  satisfies  the conditions  contained in  Section 32E of  Central  Excise  Act,  1944.   Keeping  in  view  the  plea  taken  by  the  applicant that the Company's other income was taken as sale proceeds of  clandestine clearances and the claims for deduction lodged before the  Commissioner Central Excise Kanpur vide letter dated 23.02.06 and the  comments furnished  by DGCEI,  Kanpur vide letter dated 1.03.06,  we  find  that  the  claims  and  counter  claims  needs  to  be  verified with  reference to facts and evidence on record leading to the issue of Show  Cause  Notice.   It  does  not  appear  to  be  appropriate  to  brand  the  applicant as a company not making full and true disclosure attributing  non-cooperation at this stage, subject to the outcome of the investigation  to  be  ordered  by  the  Commission,  the  application  is  admitted  under  Section 32F(1)  of  Central  Excise  Act,  1944.   The admitted amount of  Rs.12,13,611/-,  may  be  appropriated  from  the  advance  payment  of  Rs.15,00,000/- made by the applicant company.”

As can be seen from the above quoted para, counter claim filed by the assessee  

was to be verified with reference to the facts and evidence on record leading to the issuance  

of Show Cause Notice.

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Without  undertaking  that  exercise  the  Settlement  Commission passed  a  final  

order confirming the demand of the Department in the Show Cause Notice for a sum of  

Rs.57,10,562/-.  In the circumstances, we set aside the impugned judgment of the High  

Court  as  well  as  the  order  of  the  Settlement  Commission  and  we  are  directing  the  

Settlement  Commission  to  undertake  the  above  exercise  and  dispose  of  the  matter  in  

accordance with law.  The Commission may also consider remanding the matter to the  

Adjudicating Authority, if so advised, in terms of Section 32L of the Central Excise Act,  

1944.  In case the Settlement Commission itself  decides to adjudicate upon the demand,  

then due opportunity should be given to the assessee to put-forth his case.

The appeal is disposed of accordingly with no order as to costs.

....................J. [ S.H. KAPADIA ]

New Delhi, ....................J April 09, 2009 [ AFTAB ALAM ]  

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ITEM NO.41                  COURT NO.5                  SECTION III

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      Petition(s) for Special Leave to Appeal (Civil) No(s).6486/2008

(From the judgment and order dated 07/09/2007 in CMWP No. 536/2007   of The HIGH COURT OF JUDICATURE AT ALLAHABAD)

M/S JAI JAGDAMBA MALLEABLE (P) LTD.                  Petitioner(s)

                     VERSUS

UNION OF INDIA & ORS.                                Respondent(s)

(With prayer for interim relief and office report )

Date: 09/04/2009  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE S.H. KAPADIA         HON'BLE MR. JUSTICE AFTAB ALAM

For Petitioner(s) Mr. Harvinder Oberoy, Adv. Mr. Raj Kishor Choudhary, Adv. Mr. Harpreet Singh, Adv.

                    Mr. Jitendra Kumar,Adv.

For Respondent(s) Mr. K. Radhakrishnan, Sr.Adv. Ms. Purnima Bhat Kak, Adv. Mr. C.V. Subba Rao, Adv. Ms. Anil Katiyar, Adv.

                    Mr. B.V. Balaram Das,Adv.

      UPON hearing counsel the Court made the following                            O R D E R  

Leave granted.

The appeal is disposed of with no order as to costs.

         (S. Thapar)         PS to Registrar

(Madhu Saxena) Court Master

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The signed order is placed on the file.