2003 (3) TMI 663 - Commission - Central Excise

Issues Involved:

1. Demand of Central Excise Duty.
2. Adjudication and Penalties.
3. Application for Settlement and Admitted Duty Liability.
4. Verification and Reports.
5. Revised Duty Liability.
6. Revenue's Writ Petition.
7. Correlation of Invoices and Documents.
8. Final Settlement and Immunities.

Issue-wise Detailed Analysis:

1. Demand of Central Excise Duty:
The case arose from a demand notice issued by the Additional Commissioner, Central Excise, Pune-I, demanding central excise duty of Rs. 13,70,554/- for clandestinely cleared M.S. wire nails and barbed G.I. wire under the guise of traded items.

2. Adjudication and Penalties:
The demand was confirmed by the Additional Commissioner, who also imposed penalties under Section 11AC and interest under Section 11AB of the Central Excise Act, 1944. Personal penalties were imposed on the co-noticees.

3. Application for Settlement and Admitted Duty Liability:
The applicants filed for settlement, admitting a duty liability of Rs. 5,24,000/- and sought adjustment of Rs. 4,00,000/- already paid. They also sought immunities under Section 32K of the Central Excise Act, 1944. The application was allowed to proceed, and the balance amount was paid.

4. Verification and Reports:
Reports were received from the jurisdictional Commissioner and the Commissioner (Investigation). The applicant revised its duty liability to Rs. 7,06,099/- during the hearing. Revenue was directed to verify the revised duty calculation.

5. Revised Duty Liability:
After verification, the applicant admitted an additional duty payable of Rs. 6,10,927/-. Revenue filed a Writ Petition against the Interim order of the Commission but no stay was granted, allowing the proceedings to continue.

6. Revenue's Writ Petition:
Revenue contended that the applicant had cleared manufactured goods under the guise of trading invoices. They relied on statements and documents to justify the demand. The Commission noted that genuine trading activity was also undertaken by the applicant.

7. Correlation of Invoices and Documents:
The applicant accepted duty liability where a correlation was established between invoices and loading book/delivery challans. For invoices without correlating documents, Revenue relied on statements and weight-system criteria to justify the demand. The Commission found that the raw materials were received in bundles and sold according to customer requirements, supporting the applicant's claim of genuine trading activity.

8. Final Settlement and Immunities:
The case was settled with a total central excise duty of Rs. 6,75,835/-. The applicant was directed to pay the balance amount of Rs. 1,51,835/- within thirty days. Full waiver from imposition of penalty was granted due to the applicant's cooperation and the lack of concrete evidence for the higher demand. Immunity from interest in excess of 10% per annum and from prosecution was also granted. The cash security provided by the applicant was to be returned after compliance with the order.

Conclusion:
The Commission concluded that the evidence did not fully justify the higher demand by Revenue. The applicant's cooperation and partial acceptance of duty liability led to a settlement with reduced duty and full waiver of penalties and prosecution under Section 32K of the Central Excise Act, 1944.

← Previous Next →