2006 (8) TMI 511 - Commission - Central Excise

Issues Involved:
1. Differential duty demand and its justification.
2. Evidence for unaccounted production and sales.
3. Reliability of computer sheets and other documents.
4. Calculation of duty liability for different years.
5. Immunity from interest, penalty, and prosecution.

Detailed Analysis:

1. Differential Duty Demand and Its Justification:
The applicant, M/s. Trichy Steel Rolling Mills Limited, faced a differential duty demand of Rs. 10,18,78,480/-, while they admitted to an additional amount of Rs. 3,21,32,236/-. The Show Cause Notice (SCN) was issued based on investigations revealing unaccounted production and sales of MS Billets and Bars & Rods. The applicant contested the demand, arguing that it was based on uncorroborated computer printouts and lacked evidence for certain years.

2. Evidence for Unaccounted Production and Sales:
Investigations revealed unaccounted production and sales through various documents, including private records and computer statements. The applicant admitted to a shortage of 1730 MTs of billets and discrepancies in daily stock records. Statements from company executives and external parties confirmed clandestine activities. The applicant, however, challenged the reliability of these documents, claiming discrepancies and lack of corroborative evidence, especially for 2000-01 and 2001-02.

3. Reliability of Computer Sheets and Other Documents:
The applicant argued that the computer sheets used to justify the demand were maintained for ISO 9002 purposes and did not tally with other records. The Revenue countered that these sheets were reliable and supported by other evidence. The Bench noted that the computer sheets indicated both accounted and unaccounted production, which was not a requirement for ISO documentation. Therefore, the Bench found the computer sheets prima facie reliable, especially for 2002-03, supported by additional documents and admissions by the applicant.

4. Calculation of Duty Liability for Different Years:
- 2002-03 and April 2003: The applicant admitted a duty liability of Rs. 1,11,26,864/-, which the Bench accepted as it was more than the SCN demand.
- 2001-02: The Bench accepted the SCN demand of Rs. 4,36,16,861/- based on corroborative evidence of unaccounted production and clearances.
- 2000-01: The demand of Rs. 3,92,94,381/- was not fully supported by additional evidence beyond the computer sheets. Therefore, the Bench gave the applicant the benefit of doubt for this year.
- By-products: For 2001-02 and 2002-03, the Bench accepted the demand of Rs. 22,54,404/- based on the cited documents.
- Undervaluation for 2002-03: The Bench found the demand of Rs. 57,90,344/- sustainable based on the Rolling Mills Monthly Performance Report and other documents.

5. Immunity from Interest, Penalty, and Prosecution:
The applicant sought immunity from interest, penalties, and prosecution, citing financial constraints and cooperation during the investigation. The Bench granted:
- Immunity from penalty and prosecution under the Central Excise Act, 1944.
- Immunity from interest, except for 10% simple interest per annum on the duty amount.
- Immunity to co-applicants from penalties and prosecution.

Conclusion:
The Bench settled the total duty liability at Rs. 6,27,88,473/-, with the applicant required to pay the balance within 30 days. Immunities were granted as per Section 32K(1) of the Central Excise Act, 1944, with the stipulation that these could be withdrawn if material particulars were found to be withheld or false evidence provided.

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