2001 (7) TMI 1242 - Commission - Central Excise

Summary

Issues:
Settlement of duty liability, Admissibility of MODVAT credit, Immunity from prosecution, Waiver of interest liability.

Analysis:
The judgment pertains to Settlement Applications filed by M/s. Kansal Industries and their partners regarding the denial of MODVAT credit fraudulently availed during specific periods. The Central Excise Department alleged that the applicants used GP sheets not intended for final products, purchased GP sheets without utilizing them, and sold GP sheets clandestinely. Additionally, the applicants were accused of purchasing HR/CR sheets clandestinely to avail higher MODVAT credit. The applicants admitted additional duty liability and cooperated in the proceedings. The Commission admitted their applications under Section 32F(1) of the Central Excise Act, 1944, allowing payment in installments.

During the final disposal hearing, the applicants admitted the entire duty liability and paid the demanded amount except for the last installment. They requested immunity from prosecution and waiver of interest liability. The Revenue suggested imposing penalties due to deliberate wrong credits availed by the applicants. The Commission considered the case record, the applicants' cooperation, and the Revenue's submissions. The applicants were granted immunity from prosecution and penal liability under Section 32K(1) of the Act.

Regarding the waiver of interest liability, the Commission noted the deliberate availing of inadmissible credits to defraud the Revenue. They decided to charge simple interest at 10% per annum on the inadmissible credits availed by the applicants. The case was settled by accepting the payment already made towards the duty liability along with the prescribed interest. The applicants were instructed to calculate and pay the interest amount within a specified period.

The judgment also highlighted the voidance of settlement in case of fraud or misrepresentation and emphasized the conditions of immunity granted under the order. The applicants were cautioned about the consequences of non-compliance with the settlement terms.