2015 (4) TMI 1113 - Commission - Central Excise

Application for settlement - evasion of duty - Held that - In the instant case a SCN F. No. 65/KZU/KOU/Gr.A/13/5430-31 dated 23-7-2014 was issued demanding duty amounting to 18, 53, 489/- (including duty of 17, 99, 504/- Education Cess of 35, 990/- and Secondary and Higher Education Cess of 17, 995/-) on a shortage of 882, 110 M.T. of Sponge Iron. The evasion of duty on this quantity of 882.110 M.T. has been admitted by the applicant and also by the co-applicant Shri Ram Chandra Rungta in their applications for settlement. The removal of 882.110 M.T. of Sponge Iron has also been admitted by the co-applicant Shri Ram Chandra Rungta in his statement dated 16-4-2013. The applicants have admitted that they were engaged in unaccounted manufacture and clandestine removal of finished goods without payment of Central Excise duties in a planned manner. The co-applicant Shri Ram Chandra Rungta in his statement dated 16-4-2013 has also admitted that he is one of the Directors of the company and is overall in-charge of the company including production clearance and finance including direct and indirect taxation. He has also admitted removal of 882.110 M.T. of Sponge Iron without abiding by the Central Excise formalities and also admitted that even the raw material for manufacture of the unaccounted finished goods cleared from their factory without issuing any Central Excise invoices was also not entered in their books of Account. Thus there is no doubt that the applicants were knowingly engaged in unaccounted manufacture and clandestine removal of finished goods without payment of Central Excise duties in a planned manner. Therefore they do not deserve full immunity from penalty. The Bench imposes penalty of 3, 75, 000/- (Rupees three lakhs and seventy-five thousand only) on the applicant M/s. Maa Chhinnamastika Cement 1, 85, 000/- (Rupees one lakh and eighty-five thousand only) on the co-applicant Shri Ram Chandra Rungta and grants immunity from penalty in excess of these amounts. The amounts of penalty should be paid within 30 days from the date of receipt of this order. Prosecution - Subject to the payment of the aforesaid amounts the Bench grants immunity to the applicants from prosecution under the Act and Rules made thereunder in so far as this case is concerned.All the above payments and appropriation should be completed within 30 days from the date of receipt of this order. The above immunities from penalty and prosecution to the applicant and co-applicant are granted under sub-section (1) of Section 32K of the Act subject to the provisions contained in sub-sections (2) and (3) of Section 32K ibid.

Summary

Issues involved:
Settlement applications under Section 32E of the Central Excise Act, 1944 for dispute arising from show cause notice issued by DGCEI; Duty liability admission; Immunity from penalty and prosecution sought; Interest liability determination; Settlement terms and conditions; Penalty imposition; Immunity from prosecution granted.

Detailed Analysis:

1. Settlement Applications under Section 32E:
The judgment pertains to two Settlement Applications filed by M/s. Maa Chhinnamastika Cement & Ispat Pvt. Ltd. and Shri Ram Chandra Rungta under Section 32E of the Central Excise Act, 1944, seeking resolution of a dispute arising from a show cause notice issued by the Directorate General of Central Excise Intelligence (DGCEI).

2. Duty Liability Admission and Immunity Request:
The applicants admitted duty liability of Rs. 18,53,489/- and sought immunity from penalty and prosecution, highlighting their cooperation with the department and prompt payment of the demanded duty upon detection of the shortage.

3. Interest Liability Determination:
The Bench found that interest was not payable as the entire quantity of Sponge Iron was removed clandestinely before the search by DGCEI, with no evidence to the contrary presented during the proceedings.

4. Settlement Terms and Conditions:
The Bench settled the case under Section 32F(5) of the Act, determining the Central Excise Duty at Rs. 18,53,489/- and imposing penalties of Rs. 3,75,000/- on M/s. Maa Chinnamastika Cement & Ispat Pvt. Ltd. and Rs. 1,85,000/- on Shri Ram Chandra Rungta, with immunity from penalty in excess of these amounts granted.

5. Immunity from Prosecution:
Subject to payment of the prescribed penalty amounts, the applicants were granted immunity from prosecution under the Act and related Rules, with a stipulated timeframe for payment and completion of all necessary actions.

6. Compliance and Voiding of Settlement Order:
The order highlighted that all payments and actions must be completed within 30 days, with provisions for voiding the settlement if obtained through fraud or misrepresentation, as per the relevant sections of the Act.

7. Conclusion:
The judgment concludes by granting immunities from penalty and prosecution to the applicants, subject to compliance with the settlement terms and conditions, emphasizing the legal implications of fraud or misrepresentation in obtaining the settlement.