2002 (5) TMI 299 - Commission - Central Excise

Summary

Issues Involved:
1. Additional duty due from the Applicants in terms of the escalation clauses in their supply agreements.
2. Differential duty leviable and payable on the non-accountal/incorrect accountal of 27,214 kg of aluminium rods.

Issue-wise Detailed Analysis:

1. Additional Duty Due from the Applicants:
The Applicant, a manufacturer of aluminium wire rods, ingots, and conductors, was found to have not paid Central Excise Duty on price variations allowed in tender notices/purchase orders from the Rajasthan State Electricity Board (RSEB), despite being reimbursed by RSEB, including the duty element. The department issued a Show Cause Notice demanding Rs. 70,75,546/- in duty, alleging willful suppression of facts to evade duty payment. The Applicant admitted the duty liability but contended that the assessments were provisional based on a bond executed in 1985. However, the bond was discharged in 1997, and the assessments were final thereafter. The Revenue argued that the Applicants should have paid the duty on the differential values received from time to time, which they failed to do, implying financial accommodation and liability for interest on the delayed payments. The Commission held that the assessments were not provisional and directed the Applicants to pay simple interest at 10% p.a. on the delayed payment of differential duty, totaling Rs. 25,01,146/-.

2. Differential Duty on Non-accountal/Incorrect Accountal of Aluminium Rods:
During an investigation, an excess stock of 27,214 kg of aluminium wire rods was found in the Applicant's factory. The Applicant initially provided inconsistent explanations but eventually admitted that the excess stock was due to unrecorded production. The Commission noted that the seized goods were released provisionally on a Bank Guarantee and decided not to delve further into this aspect, considering the overall circumstances and the Applicant's compliance with duty payment.

Final Settlement Terms:
1. Full payment of the demand for duty amounting to Rs. 70,75,546/-.
2. Payment of interest on the deferred payment amounting to Rs. 25,01,146/- within 30 days.
3. Immunity from prosecution, penalty, and fine under the Central Excise Act and Rules for the case covered by the Application.

Additional Notes:
- The Commission emphasized that the settlement would be void if obtained by fraud or misrepresentation.
- Immunities granted are subject to the provisions of Section 32K of the Central Excise Act, 1944.