2003 (6) TMI 355 - Commission - Central Excise

Summary

Issues:
Settlement of proceedings initiated by the Commissioner, Central Excise against the Applicant for alleged non-payment of Central Excise duty, failure to register, file returns, and maintain necessary documentation.

Analysis:
The Applicant, a company engaged in manufacturing activities related to structural and Mechanical engineering, filed an application for settlement of proceedings initiated against them by the Commissioner, Central Excise. The Revenue alleged that the Applicant had manufactured M.S. Pipes falling under Chapter sub-heading 7304.90 of the Schedule to Central Excise Tariff Act, 1985 under a job work contract within the premises of another company, without discharging duty, registration, filing returns, or maintaining necessary accounts. An amount of Rs. 39,14,094/- was demanded as Central Excise duty, along with interest and penalty under the Central Excise Act, 1944.

During the hearing, the Applicant's Advocate contended that the activities did not amount to manufacture, hence registration and payment of duty were not required. The Applicant voluntarily paid 50% of the duty amount and sought clarification from the Jurisdictional Commissioner. The Advocate argued for a liberal interpretation of the law, stating that the Applicant satisfied the definition of 'assessee' and was eligible to file an application to the Commission. However, the Revenue objected, highlighting the Applicant's non-registration, failure to file returns, and incomplete disclosure of duty liability.

The Bench considered both sides' submissions and observed that the Applicant failed to provide a full and true disclosure of duty liability and the manner in which the additional duty was derived, as required by Section 32E(1) of the Act. The Applicant's assertion that the activity did not amount to manufacture was not supported by a detailed explanation of the duty amount. Additionally, the Applicant's request to ignore the condition of non-filing of returns was deemed inadmissible, as the law categorically requires filed returns for the application to be entertained.

In conclusion, the Bench found that the Applicant's application did not meet the conditions of Section 32E of the Act, as it lacked essential details and failed to comply with the statutory requirements. Therefore, the application for settlement was rejected, and the proceedings against the Applicant would continue.