2002 (10) TMI 551 - Commission - Central Excise

Summary

Issues:
1. Alleged evasion of Central Excise duty through clandestine removal of finished goods.
2. Settlement application filed by the applicant before the Settlement Commission.
3. Assessment of duty liability and other penalties.
4. Immunity from penalty, interest, and prosecution.

Issue 1: Alleged evasion of Central Excise duty through clandestine removal of finished goods

The case involved M/s. Unitex Texturisers, a registered entity under the Central Excise Act, 1944, accused of evading Central Excise duty by clandestinely removing 1,04,430 kg of texturised yarn. The evasion was discovered during a visit by officers to the factory premises, where incriminating documents were seized. The applicant admitted to the clandestine removal, leading to a duty liability of Rs. 37,96,375. The case also highlighted discrepancies in documents seized and confessional statements made by the production supervisor and the partner of the firm.

Issue 2: Settlement application filed by the applicant before the Settlement Commission

Following the show cause notice issued by the Commissioner of Central Excise, Surat-II, the applicant and the partner filed a settlement application before the Settlement Commission, Mumbai. The applicant accepted a reduced duty liability of Rs. 22,85,567 based on certain documents, while disputing the authenticity of other seized records. The Commission allowed the application to proceed and directed the applicant to pay the balance admitted duty liability within a specified timeframe.

Issue 3: Assessment of duty liability and other penalties

During the final hearing, the applicant agreed to admit the entire duty demanded in the show cause notice, amounting to Rs. 37,96,375. The Settlement Commission, considering the full disclosure and cooperation of the applicant, settled the duty liability at the said amount. The Commission directed the applicant to pay the balance admitted duty liability of Rs. 15,10,808 within 30 days. Additionally, the Commission waived the imposition of fines and penalties under the Central Excise Act, 1944, due to the applicant's cooperation and full disclosure.

Issue 4: Immunity from penalty, interest, and prosecution

The Settlement Commission granted immunity to the applicant from penalty, interest, and prosecution under the Central Excise Act, 1944, and the Indian Penal Code related to the matter covered in the application. The Commission emphasized that the settlement order would be void if obtained through fraud or misrepresentation of facts.

This judgment by the Settlement Commission resolved the issues surrounding the alleged evasion of Central Excise duty by M/s. Unitex Texturisers through clandestine removal of finished goods. The Commission accepted the applicant's settlement application, assessed the duty liability, and granted immunity from penalties and prosecution based on the applicant's cooperation and full disclosure.