2002 (8) TMI 300 - Commission - Central Excise

Issues Involved:
1. Removal of goods without payment of duty and permission.
2. Dispute over the quantity of goods removed.
3. Valuation of clandestinely removed goods.
4. Applicability of specific notifications and duty calculations.
5. Immunity from penalties and prosecution.

Detailed Analysis:

1. Removal of Goods Without Payment of Duty and Permission:
The applications for settlement were filed by various parties involved with M/s. Nova Granites (India) Limited (NG). The Commissioner of Customs alleged that NG, a 100% EOU, removed 12,500 sq. mts. of polished granite slabs and 1,500 sq. mts. of sawn marble slabs without payment of duty and without permission for sales in the Domestic Tariff Area (DTA), violating the procedures under the Central Excise Rules, 1944. The buyers admitted receipt of multiple consignments against one invoice, and the transporter's cash bills and statements supported these allegations. The notice demanded a duty of Rs. 44,48,833/- and proposed penalties and other sanctions.

2. Dispute Over the Quantity of Goods Removed:
The applicants admitted to the removal of 140 consignments without permission and duty but disputed the quantity of granite slabs in 11 consignments. They argued that these consignments were transported in light commercial vehicles with a carrying capacity of only 50 sq. mts., seeking a reduction of 550 sq. mts. from the total quantity. The Respondent Commissioner agreed to this reduction after verifying the RC books of the vehicles.

3. Valuation of Clandestinely Removed Goods:
The main issue to be settled was the valuation of the goods. The SCN proposed to assess the goods at Rs. 2000/- per sq. mt. for granite slabs and Rs. 1,300/- per sq. mt. for marble slabs based on FOB prices of export goods. The applicants contended that the goods should be valued at the maximum price of Rs. 590/- per sq. mt. for granite slabs and Rs. 440/- per sq. mt. for marble slabs, as these were export rejects sold in the DTA. The Bench found that the identity and description of the goods were not established, making it difficult to adopt the export prices. The applicants' prices were accepted due to the lack of contrary evidence from the Revenue.

4. Applicability of Specific Notifications and Duty Calculations:
The applicants agreed that the benefit of Notifications Nos. 2/95-C.EX. and 8/97-C.EX. would not be available for the clandestinely removed goods, as they applied only to goods allowed to be sold in India. The duty was to be charged under Sec. 3(1) of the Central Excise Act, 1944. The total duty payable was fixed at Rs. 11,73,080/-, with Rs. 8,37,200/- already paid during the investigation and Rs. 4,53,842/- paid after the admission of the application.

5. Immunity from Penalties and Prosecution:
The Bench granted immunity from payment of fines and penalties under the Central Excise Act and Rules, and from prosecution under the same provisions, to both the applicants and co-applicants. Immunity from payment of interest in excess of 10% was also granted, with the applicant required to pay simple interest at 10% under Sec. 11AB of the Central Excise Act, 1944. The immunities granted are liable to be withdrawn if it is found that the applicants concealed material facts or provided false evidence during the settlement proceedings.

Conclusion:
The case was settled with the quantity of granite slabs removed without payment of duty fixed at 11,950 sq. mts. and marble slabs at 1,500 sq. mts. The total duty payable was Rs. 11,73,080/-, with the applicants granted immunity from fines, penalties, and prosecution, and required to pay interest at 10%. The Settlement Commission emphasized the importance of full and true disclosure and cooperation in the settlement process.

← Previous Next →