2004 (2) TMI 471 - Commission - Central Excise

Summary

Issues: Alleged undervaluation of car parts leading to evasion of central excise duty; Settlement application seeking immunity from interest, penalty, and prosecution; Acceptance of duty liability by the applicants; Settlement terms and conditions granted by the Commission.

The judgment involves a case where M/s. Thyssenkrupp JBM Pvt. Ltd. is accused of under valuing passenger car parts supplied to M/s. Ford India Ltd., resulting in the evasion of central excise duty amounting to Rs. 79,09,483. The Commissioner of Central Excise issued a show-cause notice proposing the demand of the said duty, penalties under Section 11AC of the Central Excise Act, 1944, and interest under Section 11AB. The applicants sought settlement under Section 32E of the Act, claiming immunity from interest, penalty, and prosecution. They argued that the tooling agreement with M/s. Ford India was finalized after the alleged evasion and that they promptly paid the duty upon realization of the error. The applicants eventually accepted the entire duty liability, leading to the admission of their settlement application.

During the hearing, the applicant's Advocate emphasized their cooperation and full payment of the demanded duty, avoiding delving into legal technicalities. The Revenue representative reiterated the facts of the case. The Commission, after reviewing the settlement application, submissions, and facts, found no malicious intent on the part of the applicants. Noting the immediate payment of duty post the tooling agreement and before the show-cause notice, the Commission deemed the request for immunities from penalty, prosecution, and interest as justified.

Consequently, the Commission settled the case under Section 32F(7) of the Central Excise Act, 1944. The terms included settling the duty liability at Rs. 79,09,483, adjusted from the amount already paid, granting immunity from penalty and interest under the Act, and immunity from prosecution under the Act and the Indian Penal Code. The Commission highlighted that any concealment of material facts or false evidence by the applicant would render the settlement order void as per Section 32K(3) of the Act. The granted immunities were in accordance with Section 32K(1) of the Central Excise Act, 1944, with a cautionary note regarding the consequences of fraudulent practices by the applicant.