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TMI Blog2001 (5) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ds during that period. 3. IGL started availing the benefit of exemption from Central Excise duty, in or around June, 1992 by making use of phosphogypsum, in the manner specified in the exemption notification. IGL has been maintaining the accounts, as indicated in the notification and have been filling their RT-12 Returns, every month and returns indicating the quantity of phosphogypsum actually used. These returns were assessed regularly by the department. 4. For the production of gypsum boards, IGL uses a blend of natural gypsum and phosphogypsum. Natural gypsum is a naturally occurring mineral, which is mined and which is in the form of lumps and dry powder. Phosphogypsum is a waste generated by the phosphatic fertiliser plants. This material is sticky in nature. The industry generating this waste found it difficult to dispose off the huge stocks available with them. It is for this reason and to encourage the usage of the waste in the manufacture of other products, exemption/concession from the levy of Central Excise duty on the finished products, using such waste, in the prescribed percentage, has been provided in the exemption notification referred to above. 5. Inquiries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of final hearing. The Advocate for the Applicant accepted this and agreed to deposit the admitted liability of Rs. 1,38,73,970.44 quantified by them, less Rs. 30 lakhs already paid by them. The Commission accepted that the Applicant met the conditions of admission, laid down under the provisions of Section 32E of Central Excise Act, 1944, and accordingly allowed the Application to be proceeded with under Section 32F(1) of the Central Excise Act, and directed the Applicant, to deposit the admitted duty liability, within 30 days of receipt of the Order, less Rs. 30 lakh already deposited with the Department. The Commission further directed the jurisdictional Commissioner to take necessary steps to adjust the deposited amount of Rs. 30 lakhs, already deposited, towards duty under the appropriate head of account and report compliance to the Commission. 11. On 20-12-2000, the Applicant filed an Addendum Application with the objective to amend/add to the submissions made in their earlier Application. In this Application, the Applicant stated that while quantifying the admitted duty liability, they had taken into account three factors, to arrive at the amount of admitted liability of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notification. They had pointed out that they had initially disclosed and accepted the duty liability of Rs. 1,26,60,457/- as payable by them. However, they had amended the Application, before the Commission and had now come up with the revised duty liability to the tune of Rs. 1,61,21,635/-. In other words, they had accepted the production figures and calculations computed by Revenue, as being the basis for arriving at their duty liability, as indicated in the show cause notice. However, they were only seeking abatement, on the following three factors : (a) Abatement of amount from a cum duty price in terms of Section 4(4)(d)(ii) of the Central Excise Act. (b) Abatement on account of 3.8% loss of production, as culls, which are never sold and are ultimately destroyed, with the permission of the department. (c) Abatement on account of eligible Modvat, on the inputs, which would have been consumed in the manufacturing of the quantities of the finished product, as accepted in the show cause notice. In other words, the Applicant, had accepted the total duty demand of Revenue contained in the show cause notice less abatement on the above three counts. 14. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 511 (S.C.), in the case of M/s. Formica India Division v. CCE. The citation of 16 judgments relied upon are as under :- 1. 1988 (34) E.L.T. 30 (Bom.) at 34 - Kirloskar Brothers Ltd. v. Union of India 2. 1988 (37) E.L.T. 81 at 85 para 12 - Haryana State Electricity Board v. CCE 3. 1993 (65) E.L.T. 300 at 304 para 4 to 7 - Jagraon Machine Tools v. CCE 4. 1996 (81) E.L.T. 563 (Tribunal) = 1994 (3) RLT 855 (T) - Chamundi Steel Re-rolling Mills v. CCE 5. 1993 (49) ECR 126 (T) - Byco International Others v. CCE 6. 1994 (71) E.L.T. 1049 (T) - Saphire Steels (P) Ltd. v. CCE 7. 1994 (73) E.L.T. 660 (T) - Vivek Re-rolling Mills v. CCE 8. Order No. 105/92-B, dated 30-3-1992 - Technological Systems Ltd. 9. 1995 (78) E.L.T. 127 - Roche Products Ltd. v. CCE, Mumbai 10. 1995 (80) E.L.T. 368 - Apex Steels (P) Ltd. v. CCE, Chandigarh 11. 1996 (13) RLT 287 - PKPN Spinning Mills (P) Ltd. v. CC 12. 1996 (84) E.L.T. 60 - Dalmia Industries v. CCE 13. 1996 (84) E.L.T. 80 - Prayag Polymers (P) Ltd. v. CCE 14. 1996 (86) E.L.T. 74 (Tribunal) = 1996 (14) RLT 137 - Cimco Ltd. v. CCE 15. 1996 (84) E.L.T. 331 - Saphire Steels (P) Ltd. v. CCE 16. 1995 (77) E.L.T. 511 (S.C.) - Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltimately destroyed, with the permission of the department, is tenable or not. (iv) Whether the claim of abatement on account of eligible Modvat on the basis of inputs, which were consumed, in manufacturing the quantities of finished products, as accepted in the show cause notice, is admissible or not, and (v) The question of immunity to be granted as prayed for in the application. 21. Each of these issues will be dealt with sequentially hereinafter and the findings of the Commission, on each issue, given thereon. The areas are narrowed down to the foregoing, as the Applicants, in their Addendum Application, have accepted the full duty demand in the show cause notice as correct and have only sought relief by way of abatements from the duty demanded, on account of the aforementioned three counts i.e. issues (ii), (iii) (iv). The first issue, which has arisen in this case, which is to be resolved by the Commission, is due to the report of the Commissioner (Investigation), on the directions of the Commission, to verify certain factual positions, from records, such as quantum of production and the ratio of different inputs, upon which the question of abatement of the conces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant's Advocate, during the final hearing, stressed that in terms of Section 32E(1), the assessee may at any stage of case relating to him, make an application in such form and in such manner as may be prescribed containing a full and true disclosure of duty liability, which has not been disclosed before the Jurisdictional Central Excise Officer, the manner in which such duty has been derived, the additional amount of Excise Duty accepted to be payable, by him and such other particulars, as may be prescribed to have the case settled. 25. Further, he has stressed on the provisions of Section 32F of the Central Excise Act, which sets out the due procedure to be followed on receipt of the Application, by the Settlement Commission. In terms of Section 32F(1), the Settlement Commission, shall call for a report from the jurisdictional Commissioner of Central Excise and on the basis of the material contained in such report and having regard to the nature and circumstances of the case may by order/allow the Application to be proceeded with or reject the Application. 26. It was further pointed out that Section 32F(6), provides that where an Application, is allowed to be proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Officer, under the Central Excise Act, in relation to the case. It was pointed out, that the Central Excise Officer, has to exercise his powers and perform his functions can do so only, with reference to the duty demanded, in the show cause notice and he cannot do so in respect of any issue/demand of duty, not covered by the show cause notice. It was stressed that Commission s jurisdiction, is co-terminus with that of the Central Excise Officer. 31. In this regard it was further stressed that recoveries of duties under the Central Excise Act, are done by the Central Excise Officer, by resorting to the provisions of Section 11A, of the Act. In terms of Section 11A(1), where any duty of excise, has not been levied or paid, or has been short levied, or short paid, the Central Excise Officer may within 6 months from the relevant date, as it stood at the relevant point of time, serve notice on the person chargeable with duty which has not been levied, or paid or short levied, or short paid, requiring him to show-cause, as to why he should not pay amount specified, in the notice. 32. It was further stressed that in terms of Section 11A(2), the Central Excise Officer, shall after co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws : The further words and any other material relating to the case not covered by the application show that the commission take into consideration any other material not covered by the application but it must be one relating to the case before it. It must be remembered that this Chapter XIX-A prescribes a procedure which is a departure from the normal procedure provided by the Act. Once an application is admitted an application can be made only in respect of a pending case the commission takes over all the proceedings relating to that case which may be pending before any authority under the Act. But this power is confined to the case before the Commission, which means the case relating to the assessment year for which the application for settlement is filed and admitted for settlement to wit, assessment year 1975-76 in this case . Thus the Court held that the Commission cannot travel beyond the assessment year for which the assessee has sought to settle the case. 36. In light of the foregoing it was contended by the Applicants that the view of the Commissioner (Investigation) that the demand for duty is to be extended upto November 99 which is beyond the period of show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he excise duty is levied, price remains constant, but the assessable value is reduced, by the amount of duty payable (calculated on a cum-duty-price). Therefore, he is of the view, that the invoices are issued showing either an amount, or zero, as duty paid. Thus he has taken up the stand, that the price, in the invoice, can be taken as cum-duty-price and duty leviable, calculated and deducted accordingly. However, he has drawn the bench's attention, to the provision of Section 12A and Section 11D(1)of the Central Excise Act. 42. The representative of Revenue, during the final hearing, on 27-2-2001, has stated before the Commission that with regard to the Commissioner (Investigation) s reference to Section 11D(1) and section 12A, of the Central Excise Act, Revenue does not agree with him. 43. The Applicants have relied upon the full Bench decision of CEGAT North Region Bench, in the case of Srichakra Tyres Ltd. v. CCE, Madras - 1999 (108) E.L.T. 361 (Tribunal). The extracts from para 9.1 of the aforementioned decision of the Tribunal reads as under : Wholesale price will include the element of duty payable on any goods because such duty forms part of the consideration for sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the fact that production/process loss of 3.8% has also been allowed, there is no ground for allowing any further abatement on account of culls as claimed by the party, to arrive at reduced resultant quantity and duty. This position has also been accepted by the applicant in his submission dated 19-3-2001 in view of the above position there is, in view of the Commission, no justification for allowing any further abatement on this count. 46. The fourth issue, before the Commission, is the question of allowing abatement on account of eligible Modvat on inputs, which have been consumed in manufacturing the quantities of finished products, as accepted in the show cause notice. This issue of Modvat abatement has arisen due to the fact that the Applicant, during the relevant period, of show cause notice, was claiming the exemption, under the provisions of Notification No. 60/91-C.E., dated 25-7-1991 and therefore was not maintaining the appropriate Central Excise records and registers, as required under Central Excise Rules, in this regard. Since the whole thrust of the case, is that the Applicant is not entitled to the exemption under the aforementioned Notification, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculation arrived at by the Settlement Commission on the basis of documents furnished by M/s. India Gypsum Ltd. It appears that it is based on raw material consumption register and all the material appearing for claim are covered by various duty paying documents. Therefore, the claim of Rs. 14,07,470/- appears to be arithmetically correct. The applicant had relied upon a list of 16 judgments referred in para 18 herein above. He has specifically relied upon the judgment of Bombay High Court 1988 (34) E.L.T. 30 (Bom.) in the case of Kirloskar Brothers Ltd. The sum and substance of para 8 of excerpts therefrom are reproduced hereunder : We are told that the petitioners had paid excise duty on the compressors fitted in the air conditioners. This fact has not been disputed by Shri Desai, however, stated that if the petitioners wanted to take credit for the excise duty paid on the compressors, they would have to follow a particular procedure prescribed under the Act and Rules which they admittedly did not follow. In our opinion, this submission of Shri Desai does not hold water. In this case, the Central Excise authorities have determined the excise duty payable by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of, wrong availment till the date of payment of duty. 50. In view of our findings as stated above, the case is ordered to be Settled, in accordance with the provisions of sub-section (7) of Section 32F, by accepting an amount of Rs. 1,61,21,635/- as total duty payable after allowing the permissible deductions as held hereinabove by the Commission. 51. In addition to the total duty liability as stated herein above simple interest @ 10% p.a., from the month of availing inadmissible exemption under Notification No. 60/91-C.E., dated 25-7-1991 will be payable, till the date of payment. We clarify that the interest amount shall be worked out by the Applicants for the inadmissible concession availed of from 13-3-1999 to 23-7-1999 and intimated to the Commission, within 2 weeks of receipt of this order. The amount of interest so calculated shall be payable, within 30 days of receipt of a copy of this order by the Applicants alongwith any other differential amounts that may be due in accordance with the aforementioned finding of the Commission. 52. Since the Applicants have fully co-operated with the Commissions, they are granted immunity from prosecution for offences under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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