2014 (3) TMI 1078 - Commission - Central Excise

Application to settle the case before settlement commission - Clandestine removal - MS Ingots - contravention of provisions of Rules 4, 6, 8, 10, 11 and 12 of the CER, 1944 read with Sections 91 and 93 of the FA, 2001 and Sections 136 and 138 of the FA, 2007 - applicability of the provisions of Section 32-O(1)(i) - whether the application of the co-applicant can be settled when the main applicant is not eligible to come before the Settlement Commission? - Held that - The provisions of Section 32-O(1)(i) are clear. The bar against filing of subsequent application under Section 32-O(1)(i) is attracted in this case to make the application of the applicant liable to dismissal. The Bench has no jurisdiction to entertain such an application as it is barred by Section 32-O(1)(i) of the Central Excise Act, 1944 and is liable to dismissal, without going into the merits of the case. The application of the co-applicant cannot be settled when the main applicant is not eligible to come before the Settlement Commission. In terms of Section 32-O(1)(i) of the Central Excise Act, 1944, without going into the merits of the case, both the applications are outrightly rejected and dismissed - decided against applicant.

Summary

Issues Involved:
1. Allegations of clandestine removal of excisable goods and evasion of duty.
2. Admissibility of the settlement application under Section 32E of the Central Excise Act, 1944.
3. Applicability of Section 32-O(1)(i) regarding the bar on subsequent applications for settlement.

Detailed Analysis:

1. Allegations of Clandestine Removal and Evasion of Duty:
The applicant, M/s. Shakambhari Overseas Trades Pvt. Ltd., and its director were accused of manufacturing excisable goods (M.S. Ingots, Oxygen gas, and Nitrogen gas) and clandestinely removing these goods without payment of duty. A joint physical verification by DGCEI officers revealed shortages of 154.250 MT of M.S. Ingots and 892.060 MT of Pig Iron. The applicant was alleged to have suppressed actual clearance and did not enter the same in the Daily Stock Account register, nor did they issue Central Excise invoices or pay duty, thus contravening several provisions of the Central Excise Rules, 1944, and the Cenvat Credit Rules, 2004. The applicant admitted the demand of C.E. duty amounting to Rs. 25,04,134/- and additional interest of Rs. 53,608/-.

2. Admissibility of the Settlement Application:
The applicant and co-applicant sought settlement under Section 32E of the Central Excise Act, 1944, admitting their duty liability and requesting immunity from penalty and prosecution. The Commissioner of Central Excise, in his report, confirmed the clandestine removal and suggested that the applicant's prayer for immunity from penalty should not be granted. The Settlement Commission examined whether the applicant was eligible to apply for settlement, given that they had been penalized earlier in a similar case.

3. Applicability of Section 32-O(1)(i):
The critical issue was whether the applicant was barred from filing a settlement application under Section 32-O(1)(i) of the Central Excise Act, 1944, which states that if a penalty is imposed for concealment of duty particulars in an earlier settlement order, the applicant cannot apply for settlement in any other matter. The applicant had been penalized Rs. 1.5 lakhs in a previous settlement order dated 18-5-2011 for similar contraventions.

The learned Consultant argued that the bar under Section 32-O(1)(i) should only apply if the concealment was found in the application before the Settlement Commission and not if it was related to concealment before the Central Excise Officer. However, the Commission held that the statutory provisions of Section 32-O(1)(i) are clear and unambiguous. The penalty imposed in the earlier order was for concealment of duty liability, and thus, the applicant is barred from filing another settlement application.

The Commission emphasized that the penalty imposed under Section 32F(5) for concealment of duty liability relates to the total duty liability, including any additional duty discovered during the settlement process. Therefore, the bar under Section 32-O(1)(i) is applicable, and the applicant's current application is rejected.

Conclusion:
The Settlement Commission concluded that since a penalty was imposed on the applicant in an earlier settlement order for concealment of duty particulars, the applicant is barred from filing another settlement application under Section 32-O(1)(i). Consequently, both the applications of the applicant and the co-applicant were dismissed, and the case was sent back to the jurisdictional Central Excise officer for adjudication.