2015 (5) TMI 592 - HC - Central Excise

Duty demand - MIsdeclaration of goods - Wrong claim of exemption - Held that - duty admitted by the petitioner before the CCESC was ₹ 37,38,184/- which was settled at ₹ 36,90,325/-. The CCESC has accepted that the petitioner had extended co-operation in the proceedings before them. However, section 32K(1) of the Act requires both co-operation and full and true disclosure of the duty liability. It cannot be possibly said that while observing as above, the CCESC took into account any irrelevant material or ignored relevant material. The conduct of the petitioner was a relevant factor to be taken into account. The fact that the petitioner had indulged in evasion of central excise duty by clearing nylon monofilament yarn of cross sectional dimension above 1 mm under the guise of nylon nil rate of duty and thereby, it is clear there was a deliberate intention to evade duty by mis-declaring the goods in order to avail exemption and but for detection by the department during investigation by the department, the evasion would have gone unnoticed, is also a relevant factor to be taken into account - Decided against assessee.

Issues:
1. Petition for modification of final order regarding duty liability, interest, and penalty.
2. Dispute over payment of interest and penalty by the petitioner.
3. Review of the Settlement Commission's order and grant of immunity from prosecution.
4. Legal provisions governing the Customs and Central Excise Settlement Commission (CCESC) and immunity from penalty.

Analysis:

Issue 1:
The petitioner filed a petition seeking modification of the final order related to duty liability, interest, and penalty. The petitioner contended that interest should only be charged on the duty liability paid in cash, not on the amount paid through Cenvat credit. The petitioner argued that the department had miscalculated the interest, considering the entire duty amount irrespective of the mode of payment. The court examined the decision-making process and found no fault with the imposition of interest and penalty, given the deliberate evasion of excise duty by the petitioner.

Issue 2:
The dispute revolved around the petitioner's failure to comply with the Settlement Commission's order by not paying the imposed penalty and interest. The respondent highlighted the petitioner's evasion of duty by mis-declaring goods to avail exemptions. The court noted that the petitioner's conduct, including deliberate evasion, was crucial in determining the interest and penalty. The court upheld the Settlement Commission's decision, emphasizing the need for full and true disclosure of duty liability for immunity from penalty.

Issue 3:
The petitioner sought a review of the Settlement Commission's order and immunity from prosecution. The court observed that the Commission settled the total duty liability after considering the petitioner's cooperation and disclosure. The court emphasized that the Commission's decision was based on relevant factors, including the petitioner's evasion of excise duty. Consequently, the court dismissed the petition, finding no grounds to interfere with the Commission's order.

Issue 4:
The legal provisions governing the CCESC's functions and powers were analyzed. The CCESC settles cases in accordance with the law and has the power to grant immunity from penalty under specific conditions. The court highlighted that the CCESC's decision-making process must adhere to the provisions of the Act. Immunity from penalty is granted based on cooperation and full disclosure of duty liability, subject to compliance with the settlement terms.

In conclusion, the court dismissed the writ petition, upholding the Settlement Commission's order and emphasizing the importance of full disclosure and cooperation for immunity from penalty. The judgment underscored the need for adherence to legal provisions and the CCESC's role in settling cases within the framework of the law.

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