2006 (5) TMI 438 - Commission - Central Excise

Issues Involved:
1. Admission of duty liability and quantification of differential duty.
2. Dispute regarding specific annexures (D-1, D-2, D-3, D-4, D-5, D-8, D-9, D-10, D-11, D-12, D-13).
3. Seizure of cash and its return.
4. Jurisdiction of the Settlement Commission.
5. Final settlement terms including duty liability, interest, and immunity from penalties.

Issue-wise Detailed Analysis:

1. Admission of Duty Liability and Quantification of Differential Duty:
The applicant admitted a duty liability of Rs. 13,01,193/- against the differential duty of Rs. 36,45,488/- demanded in the Show Cause Notice. The applicant's admissions were based on specific annexures (D-6, D-7, D-9), while other annexures were disputed due to various reasons.

2. Dispute Regarding Specific Annexures:

Annexure D-1:
Out of Rs. 5,75,426/-, the applicant admitted Rs. 5,41,811/-. The remaining Rs. 33,615/- was disputed as it was an opening balance in the 'LIC Diary' not correlated to any cash receipts. The investigation agreed there was no evidence linking the opening balance to illegally cleared goods. The Commission accepted the applicant's admitted liability.

Annexures D-2, D-3, and D-4:
The total amount involved was Rs. 1,98,890/-, with the applicant admitting Rs. 1,43,519/- and disputing Rs. 55,371/-. The Commission found the documents and the statement of Shri Arumugam indicated the entire amount pertained to illegal clearances, confirming the entire Rs. 1,98,890/-.

Annexure D-5:
The revised demand was Rs. 9,695/-. The applicant admitted Rs. 5,703/- and agreed to pay the disputed Rs. 3,992/- due to the insignificant amount involved. The entire amount was admitted.

Annexure D-8:
The revised duty demand was Rs. 8,683/-. The applicant did not admit any amount, arguing the transactions were paid by cheques. The Commission found the Revenue's arguments about cash payments convincing and confirmed the entire Rs. 8,683/-.

Annexure D-9:
The applicant admitted the amount.

Annexure D-10:
The revised duty demanded was Rs. 9,74,068/-, with the applicant admitting Rs. 2,42,405/-. The remaining Rs. 7,31,663/- was disputed as it pertained to future supplies. The Commission gave the applicant the benefit of doubt, not confirming the disputed amount.

Annexure D-11:
The revised duty demand was Rs. 7,77,069/-, with the applicant not admitting any amount. The Commission found no direct evidence linking the clearances to the manufacturer and did not confirm any amount.

Annexures D-12 and D-13:
The duty demands were Rs. 1,26,663/- and Rs. 4,27,121/- respectively, based on alleged under-valuation. The Commission found the applicant's plea regarding the sale price to independent buyers valid and did not sustain the demands.

3. Seizure of Cash and Its Return:
The applicant argued that Rs. 52,50,000/- was received from property sales, supported by affidavits. The Commission noted the Show Cause Notice did not indicate any other clandestine clearances beyond those for which duty was demanded. The Commission ordered the return of the seized cash.

4. Jurisdiction of the Settlement Commission:
The Revenue argued the Commission lacked jurisdiction to decide on the seized cash. However, the Commission cited a previous case where it had released seized cash and decided to return the cash in this case as well.

5. Final Settlement Terms:
The application was settled with a duty liability of Rs. 13,69,239/-. The applicant had already paid Rs. 13,01,193/-, and the balance Rs. 68,046/- was to be paid within 15 days. Simple interest at 10% per annum was to be paid on the duty amount. Immunity from fine, penalty, confiscation, and prosecution was granted to the applicant and co-applicants. The seized material and vehicle were to be returned.

Conclusion:
The Commission settled the application with specific terms, including the payment of the remaining duty, interest, and granting immunity from penalties. The seized cash and materials were ordered to be returned, and the settlement was subject to conditions to prevent fraud or misrepresentation.

← Previous Next →