2004 (7) TMI 609 - Commission - Central Excise

Issues Involved:
1. Allegations of suppression of production and clearance of goods.
2. Mis-declaration of dutiable goods as exempted goods.
3. Mis-declaration of the value of dutiable goods.
4. Utilization of common inputs for both dutiable and nil-rated goods without maintaining separate accounts.
5. Demand for differential duty on wrappers supplied to M/s. A.V. Thomas Leather and Allied Products Limited.
6. Calculation errors in duty quantification.
7. Request for deeming value as cum-duty value.
8. Immunities from penalty, prosecution, and interest.

Issue-wise Detailed Analysis:

1. Allegations of Suppression of Production and Clearance of Goods:
The SCN alleges that the main applicant maintained various documents to suppress production and clearance of goods to wrongfully avail benefits of SSI exemption, thereby evading duty. The SCN proposes to demand duty of Rs. 23,59,099/- for the period 1996-97 to 1999-2000 under Section 11A(1), Rs. 13,269/- under Section 11D, and Rs. 9,99,648/- under Rule 57CC read with Rule 57I of the erstwhile CER. The notice also proposes penalties and interest on the main applicant and co-applicants.

2. Mis-declaration of Dutiable Goods as Exempted Goods:
The SCN alleges that the main applicant mis-declared dutiable goods as exempted goods to evade payment of duty. The applicant admitted partial liability and sought immunities from penalties, prosecution, and interest.

3. Mis-declaration of the Value of Dutiable Goods:
The SCN alleges that the main applicant mis-declared the value of dutiable goods to certain customers and adopted different modes of documents for realization of sale proceeds, leading to short payment of duty. The applicant admitted certain calculation errors and sought the value realized to be deemed as cum-duty value.

4. Utilization of Common Inputs for Both Dutiable and Nil-rated Goods Without Maintaining Separate Accounts:
The SCN alleges that the main applicant utilized common inputs for both dutiable and nil-rated goods without maintaining separate accounts and failed to pay 8% of the price for the final products cleared under nil rate of duty as per Rule 57CC of the erstwhile CER. The applicant admitted partial liability based on a circular but contested the demand for Rs. 9,99,648/-.

5. Demand for Differential Duty on Wrappers Supplied to M/s. A.V. Thomas Leather and Allied Products Limited:
The applicant contested the demand for Rs. 4,97,106/- on the grounds that the supplied items were labels, not excisable goods. However, they later admitted a liability of Rs. 4,62,404/-.

6. Calculation Errors in Duty Quantification:
The applicant pointed out calculation errors in the duty quantification, which were partially conceded by the Revenue. The final admitted liability on this count was Rs. 18,53,445/-.

7. Request for Deeming Value as Cum-duty Value:
The applicant sought the benefit of deeming the value adopted for demand as cum-duty value, relying on the Supreme Court decision in CCE New Delhi v. Maruti Udyog Ltd. The Bench extended this benefit for the admitted portion of the duty demand, reducing the net liability to Rs. 15,69,500/-.

8. Immunities from Penalty, Prosecution, and Interest:
The applicant sought immunities from penalties, prosecution, and interest. The Bench granted partial immunity from interest in excess of 10% p.a. simple interest and full immunity from penalties and prosecution.

Settlement Terms:
1. Duty liability settled at Rs. 22,62,439/-. The applicant to pay the balance amount of Rs. 5,25,623/- within 30 days.
2. Immunity from penalties granted.
3. Immunity from interest granted in excess of 10% p.a. simple interest.
4. Immunity from prosecution granted.

Conclusion:
The applications were settled with the applicant required to pay the settled duty amount and granted partial immunity from interest and full immunity from penalties and prosecution. The settlement was made under Section 32F(7) of the Central Excise Act, 1944.

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