2003 (4) TMI 481 - Commission - Central Excise

Summary

Issues: Settlement application for duty liability, clandestine clearances, immunity under Section 32K of CEA'44, preponderance of probability, conditions of settlement under Section 32F(7) of CEA'44.

The judgment pertains to a settlement application filed by a partnership concern engaged in manufacturing "Flush doors" for duty liability arising from alleged clandestine clearances. The Additional Commissioner, Central Excise, Mumbai-III issued a demand notice alleging duty evasion of Rs. 16,15,849/- through parallel invoices. The duty demand was confirmed, and penalties imposed. The applicants admitted additional duty liability of Rs. 4,00,474.24 seeking immunity under Section 32K of CEA'44. During the admission hearing, the admitted duty liability was revised to Rs. 4,44,139/-. The case involved a period from 2nd April 1998 to 28th January 1999, where clandestine clearances were made using parallel invoices. The applicants cooperated and made full disclosure. The Revenue presented evidence of clandestine clearances based on seized duplicate invoices and statements of involved parties, which were not retracted.

The Settlement Commission analyzed the evidence, finding substantial authenticity in the Revenue's evidence of clandestine clearances. The Commission observed discrepancies in the applicant's claim of maintaining computer records of clandestine removals while destroying physical duplicate invoices. The Commission concluded that the duty demanded in the show cause notice was valid and settled the case accordingly. The settlement conditions under Section 32F(7) of CEA'44 required the balance duty of Rs. 11,15,849/- to be paid within 30 days. Immunity was granted from certain fines and penalties, with a penalty of Rs. 50,000/- imposed on the firm. Immunity from prosecution under the Central Excise Act, 1944, was also granted. The settlement order would be void if obtained through fraud or misrepresentation. All parties were informed of the decision.