2002 (6) TMI 562 - Commission - Central Excise

Summary

Issues:
1. Settlement application under Section 32E(1) of the Central Excise Act, 1944.
2. Eligibility for immunities sought by the applicant - penalty, interest, and prosecution.

Analysis:
1. The judgment pertains to an application filed by M/s. SRF Limited for settlement under Section 32E(1) of the Central Excise Act, 1944, concerning a Show Cause Notice (SCN) issued by the Commissioner of Central Excise, Chennai-1. The applicant admitted the duty liability proposed in the SCN, which was already paid by them. The issue remaining was the eligibility of the applicant for sought immunities under the Act.

2. Regarding immunity from penalty, the applicant fulfilled the conditions of full disclosure and cooperation, making them eligible for immunity under Section 32K(1) of the CEA, 1944, despite Revenue's objections on the manner of duty evasion.

3. Concerning immunity from interest, the applicant argued that as per Rule 57-I(5) of the erstwhile Central Excise Rules, no interest should be charged as they did not wrongly avail any credit. Citing a CEGAT decision, the applicant contended that interest was not applicable in their case, a stance supported by the Bench's analysis of Section 11AB and Rule 57-I.

4. The Bench scrutinized the provisions of Section 11A and Rule 57-I, emphasizing that Section 11A does not apply to cases covered under Rule 57-I, especially for recovery of Modvat credit. The proposal in the SCN to demand interest was deemed invalid, given the circumstances of the case.

5. The judgment also addressed the request for immunity from prosecution, noting that the duty involved was below the enhanced monetary limit for prosecution set by the Central Board of Excise and Customs. The absence of specific reasons from Revenue to prosecute the applicant further supported the grant of immunity.

6. Ultimately, the Settlement Commission settled the case, determining the total duty liability, which was already paid by the applicant. No interest was levied, and the applicant was granted immunity from penalty and prosecution under the Central Excise Act and Rules. The immunities granted were subject to withdrawal if obtained through fraudulent means, as per Section 32K(3) of the Act.