2002 (11) TMI 743 - Commission - Central Excise

Summary

Issues:
Settlement of duty liability and abatement calculation for clandestine removal of goods.

Analysis:
The case involved M/s. Ronak Ceramic Industries Ltd. and its Director regarding evasion of duty on ceramic glazed tiles. The officers found excess stock and shortages during a search, leading to a duty demand of Rs. 3,94,951. The applicants filed settlement applications accepting a duty liability of Rs. 2,01,655, with Rs. 50,000 already paid and the balance to be cleared. The Commission allowed the applications to proceed and directed payment adjustment and interest. The applicants contended the assessable value based on MRP and abatement under Section 4A of the Central Excise Act. The Revenue opposed abatement due to clandestine removal.

The Commission requested submissions from both parties and scheduled a final hearing. However, due to management changes in the applicant company, a hearing was postponed. The Commission decided to finalize the case without a hearing as the records contained relevant information. The Revenue did not appear during this process. The case primarily revolved around the duty liability admitted by the applicants, abatement calculation, and the Revenue's stance on the assessable value for clandestine removal.

The Commission reviewed the submissions and records, noting the Revenue's position on abatement and the applicant's calculations. The applicant contested duty on shortages but questioned the assessable value for clandestine removal. The Commission found no contest on shortages but discrepancies in assessing duty for clandestine removal. It analyzed Notification No. 20/99-C.E. (N.T.) and concluded that abatement should apply to goods clandestinely removed, accepting the additional duty liability declared by the applicant.

In the settlement terms, the duty was settled at Rs. 2,01,655, with no further amount payable. Interest payment was acknowledged, and immunity from further interest was granted. The applicants received immunity from fines, penalties, and prosecution under certain acts based on their cooperation and disclosure. These immunities were provided under Section 32K(1) of the Central Excise Act, with a caution that the order would be void if obtained through fraud or misrepresentation. All parties were duly informed of the decision.