2006 (8) TMI 475 - Commission - Central Excise

Summary

Issues: Application for waiver of penalty and grant of immunity from prosecution under Rule 209A of the Central Excise Rules and Rule 26 of Central Excise Rules.

Analysis:
1. Application for Waiver of Penalty and Immunity from Prosecution: Shri P. Srinivasulu Reddy, a co-noticee in a Show Cause Notice (SCN) issued to a company, filed a separate application seeking waiver of penalty and immunity from prosecution under Rule 209A of the Central Excise Rules and Rule 26 of Central Excise Rules. He claimed that he was not involved in any activities related to excisable goods liable for confiscation, thus arguing against the imposition of penalties. He requested settlement and immunity from prosecution.

2. Opposition by Revenue: The Revenue opposed the admission of Reddy's case, citing lack of disclosure before the Settlement Commission as required by statutory provisions. The Revenue's submissions highlighted allegations against Reddy in the SCN, accusing him of being actively involved in the suppression of production, unaccounted sales, and collection of cash for unrecorded transactions related to excisable goods liable for confiscation.

3. Hearing and Decision: The case was heard with Reddy present to argue his position. Reddy claimed to be a paid employee with decisions made by the Chairman, who was based in Bangalore. The Revenue maintained its stance on the lack of disclosure by Reddy, emphasizing the mandatory requirement of true and full disclosure under Section 32E of the Central Excise Act. Despite Reddy's protests, the Bench found evidence of unaccounted removals under his supervision and his knowledge of sales procedures and cash collections. As Reddy did not disclose his activities, his application was rejected under Section 32F(1) of the Central Excise Act. However, he was given the option to file a fresh application as a co-applicant with the company for settlement.

In conclusion, the judgment addressed the application for waiver of penalty and immunity from prosecution by Shri P. Srinivasulu Reddy, detailing the arguments presented by both parties, the allegations against Reddy, the lack of disclosure, and the final decision to reject his application while allowing the possibility of a fresh application as a co-applicant.