2001 (8) TMI 447 - Commission - Central Excise

Summary

Issues Involved:
1. Application for settlement of excise duty liability.
2. Allegation of suppression of facts and extended period for demand.
3. Admissibility of the amount disclosed by the applicant.
4. Compliance with the provisions of Section 32E and Section 11A of the Central Excise Act, 1944.
5. Full and true disclosure requirement for settlement.

Detailed Analysis:

1. Application for Settlement of Excise Duty Liability:
The applicants, including M/s. Procter & Gamble India Ltd., Goa, filed an application for settlement of their excise duty liability amounting to Rs. 11,52,72,957/-. They accepted a duty liability of Rs. 2,75,31,458/- and sought immunity from prosecution, fine, penalty, and interest.

2. Allegation of Suppression of Facts and Extended Period for Demand:
The show cause notice dated 15-10-1999 alleged that the applicants were involved in manufacturing activities at M/s. Modern Hygiene Products Pvt. Ltd., Goa, and had cleared goods to their sales depots without paying the appropriate excise duty. The notice invoked the extended period under Section 11A of the Central Excise Act, 1944, citing suppression of facts, collusion, and misrepresentation.

3. Admissibility of the Amount Disclosed by the Applicant:
The applicants admitted an additional duty liability of Rs. 2,75,31,458/- for the period 1-10-1996 to 31-3-1997, considering it a "reasonable period." However, the Commission questioned the rationale behind admitting a partial amount when the entire period of demand (1-11-1994 to 31-3-1997) involved similar allegations of suppression and collusion.

4. Compliance with the Provisions of Section 32E and Section 11A of the Central Excise Act, 1944:
Section 32E requires a full and true disclosure of duty liability not previously disclosed to the Central Excise Officer. The Commission noted that the applicants' disclosure did not meet this criterion as it did not cover the entire period of demand. The six-month period referenced by the applicants should align with the date of the show cause notice, not the manufacturing period.

5. Full and True Disclosure Requirement for Settlement:
The Commission emphasized that a full and true disclosure is a prerequisite for settlement under Section 32E. The partial admission of duty liability by the applicants indicated an incomplete disclosure. The Commission referred to the Madras High Court decision in V.M. Shaik Mohammed Rowther v. Settlement Commission, which highlighted the necessity for honest and complete disclosure for settlement proceedings.

Conclusion:
The Commission concluded that the applicants had not made a full and true disclosure of their duty liability as required under Section 32E(1). Consequently, the applications filed by M/s. Procter & Gamble India Ltd., Goa, and the co-noticees were not allowed to be proceeded with under Section 32F(1) of the Central Excise Act, 1944.