"Where an order of settlement passed under sub-section (7) of section 32F, as it stood immediately before the commencement of section 122 of the Finance Act, 2007 (22 of 2007) or sub- section 5 of section 32F, provides for the imposition of a penalty on the person who made the application under Section 32E for settlement, on the ground of concealment of particulars of his duty liability; then, he shall not be entitled to apply for settlement under Section 32-E in relation to any other matter.
Explanation: In this clause, the concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer."
+ The question which necessitates examination is whether the Explanation added to Section 32-O(1)(i) of the Act, w.e.f . 06.08.2014, is prospective or retrospective in its application. If it is the latter, the Settlement Commission was then justified in rejecting the petitioner's application by its Order dated 14.11.2014 on the ground that they had, by the earlier Orders dated 30.10.2013 and 06.11.2013, suffered penalty for concealment of particulars of their duty liability before the Central Excise Officer. If, on the other hand, the Explanation only operates prospectively, we must then examine whether Section 32-O(1)(i) of the Act, before the Explanation was added thereto, barred an application being entertained by the Settlement Commission when, by its earlier orders, it had imposed penalty on the very same applicant for concealment of duty liability before the Central Excise Officer.
+ On a conjoint reading of Section 32-O(1)(i) of the Act, and the Explanation thereto, it is clear that, if penalty is imposed on the applicant by an order passed by the Settlement Commission under Section 32- F(5) of the Act for concealment of particulars of their duty liability from the Central Excise Officer, the applicant is thereafter not entitled to apply for settlement under Section 32-E in relation to any other matter. The petitioner herein was imposed penalty of Rs.2,35,000/- and Rs.19,00,000/- by the order of the Settlement Commission dated 30.10.2013 and 06.11.2013 respectively for concealment of duty liability from the Central Excise Officer. If the Explanation to Section 32-(O)(1)(i) of Act is held to apply retrospectively, the Settlement Commission must then be held to be justified in passing the impugned order dated 14.11.2014 rejecting the petitioner's application for settlement dated 25.11.2013.
+ While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch upon a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. It is settled law that a right of appeal, being a substantive right, preserves all successive appeals available under the law then in force to the parties to the Suit throughout the rest of the career of the suit.
+ It is settled law that the Court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute. As the newly inserted Explanation to Section 32-O(1)(i) does not indicate that it was enacted to remove any doubt or declare what the law has always been, it must be construed to be an ordinary remedial piece of legislation which would come into effect from the date of its enactment, and not a declaratory Act. A remedial Act is not necessarily retrospective. While it may either be enlarging or restraining, it takes effect prospectively, unless it is given retrospective effect by the express terms of the statute or by necessary intendment. It is difficult to hold that the Explanation to Section 32-O(1)(i) of the Act has retrospective effect even prior to 06.08.2014 when it was introduced into the Act. Consequently Section 32-O(1)(i) of the Act, (prior to 06.08.2014 when an Explanation was inserted thereto), did not, when it spoke of concealment of particulars of duty liability, mean only concealment of particulars of duty liability before the Central Excise Officer.
+ The very fact that an Explanation was added to Section 32-(O)(1)(i) of the Act with effect from 06.08.2014 goes to show that, prior thereto, the said provision was presumed, even by the legislature, to suffer from ambiguity necessitating legislative intervention and an Explanation being added thereto. Further even if it is presumed that Section 32-O(1)(i) is capable of more than one construction and the construction placed thereon, that concealment of particulars of duty liability relates to concealment either before the Settlement Commission or the Central Excise Officer, were to be held also to be a possible interpretation, it is well settled law that, in case of ambiguity in a fiscal/penal statute and where the provision is capable of being construed in more than one manner, the construction which favours the assessee should be preferred. In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any: the court must interpret the statute as it stands and in case of doubt in a manner favourable to the taxpayer.
+ Viewed from any angle, the Settlement Commission has erred in rejecting the petitioner's application for settlement dated 25.11.2013, by its order dated 14.11.2014, on the ground that the said application was barred by Section 32-(O)(1)(i) of the Act. As noted hereinabove the Explanation to Section 32-O(1)(i) does not have retrospective effect and, consequently, the petitioner's application dated 25.11.2013 would be barred under Section 32-(O)(1)(i) of the Act only if either of the two earlier settlement applications, submitted by the assessee, had suffered imposition of penalty for concealment of duty liability before the Settlement Commission itself.
(See 2016-TIOL-1576-HC-AP-ST)
