2001 (7) TMI 415 - AT - Central Excise

Summary

Issues:
Rectification of Mistake (ROM) regarding imposition of demand, fine, and penalty post settlement under Kar Vivad Samadhan Scheme, 1998 (KVSS).

Analysis:
The Revenue filed a Rectification of Mistake (ROM) application challenging the Tribunal's Final Order, arguing that post-settlement under the KVSS, imposition of demand, fine, and penalty was permissible. The Revenue sought to rectify the apparent mistake in the Tribunal's order dated 31-8-2000. The issue revolved around whether demands, fines, and penalties could be imposed after settlement under the KVSS.

The Tribunal examined the facts of the case where Central Excise duty was demanded on Khandsari Molasses procured by the respondents for liquor manufacturing. The duty was demanded on molasses seized on 17-6-1997 and molasses received between 1-3-1997 to 6-6-1997. The respondents paid duty for the seized molasses before the show cause notice. Subsequently, the respondents opted for settlement under the KVSS, declaring their cases on 29-12-1998 and covering additional entities under the scheme.

The Tribunal's order dated 31-8-2000 considered the show cause notice's allegations of confiscation and duty non-payment, which were settled under the KVSS. The Tribunal found the Commissioner's order on redemption fine invalid and noted that separate penalty imposition was unnecessary due to the KVSS provisions. The Tribunal analyzed the KVSS provisions, emphasizing that only unpaid duty, cesses, interest, fines, or penalties indicated in show cause notices could be considered as tax arrears under the scheme.

Regarding the seized molasses, the Tribunal found that the duty had been paid before the show cause notice, and the respondents had settled the matter under the KVSS. As the duty on seized goods was paid and no penalty was imposed during the declaration, the show cause notice was deemed withdrawn under Section 90(4) of the Act. The Tribunal concluded that as the respondents had paid the determined amount and the duty on seized goods, the show cause notice was no longer valid, as per the KVSS provisions.

After thorough consideration of the facts and legal provisions, the Tribunal rejected the ROM application, finding no merit in the Revenue's argument. The judgment upheld the settlement under the KVSS and deemed the show cause notice withdrawn, emphasizing compliance with the scheme's requirements and settlement terms.