2009 (4) TMI 734 - Commission - Central Excise

Summary

Issues Involved:
1. Rectification of typographical errors in the Final Order.
2. Calculation of duty liability based on the number of pouches per bag.
3. Alleged duplication of duty demand due to re-booking of consignments.
4. Imposition of penalty and interest.

Detailed Analysis:

1. Rectification of Typographical Errors:
The Commission acknowledged the presence of typographical errors in the Final Order No. F-779-780/CE/08-SC(PB) dated 29-2-2008 and issued a Corrigendum dated 28-3-2008 to rectify these mistakes. The specific corrections included changes in the number of bags and pouches, and the balance amount of duty payable, which were detailed in the Corrigendum.

2. Calculation of Duty Liability Based on Number of Pouches Per Bag:
The applicant contended that the Commission had incorrectly assumed the number of pouches per bag, leading to a higher duty demand. The Commission had assumed each 41 Kg. bag contained 3700 pouches of 10 gms., and each 65 Kg. bag contained 6200 pouches of 10 gms. The applicant argued that, as per the SCN, a 41 Kg. bag contained 5200 pouches of 7 gms., and a 65 Kg. bag contained 6000 pouches of 10 gms. The Commission reviewed this contention and agreed to rectify the minor error in the calculation for the 41 Kg. bags, reducing the settled duty amount by Rs. 4,06,625/-, resulting in a new total of Rs. 4,70,02,428/-.

3. Alleged Duplication of Duty Demand Due to Re-booking of Consignments:
The applicant argued that the duty demand included duplication because consignments booked from Kanpur were re-booked from intermediate stations like LTT Kurla/Bhusawal. The Commission, however, found no evidence of duplication, as the consignments from intermediate stations could not be correlated with those from Kanpur. The Commission justified that all RRs containing the description "Khaini" were to be considered for duty calculation, and no mistake was found in this regard.

4. Imposition of Penalty and Interest:
The applicant contended that the penalty imposed was excessive and argued for immunity from penalty and interest, citing that they had deposited the duty before the issuance of the SCN. The Commission clarified that under Section 11AC of the Act, there is no provision for total waiver of penalty, even if the duty is paid before the SCN. The Commission also noted that the benefit of reduced penalty (25% of duty) under the Proviso to Section 11AC applies only to orders by a Central Excise Officer, not the Settlement Commission. The Commission emphasized that it has the authority to grant immunity from prosecution, penalty, and interest as part of the settlement process, which is distinct from the adjudication by a Central Excise Officer. Therefore, the imposition of penalty and interest as per the Final Order was upheld, and the applicant's request for reduction was rejected.

Conclusion:
The Commission ordered the rectification of the calculation error regarding the number of pouches in 41 Kg. bags, reducing the total settled duty to Rs. 4,70,02,428/-. All other prayers, including those for reduction of penalty and interest, were rejected. The applicant was directed to deposit the remaining duty, interest, and penalty within 15 days of receiving this Order.