9911796707
TMI Blog2001 (7) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid SCN, the main applicant, having their registered office at 1-7-396/397, Park Lane, Secunderabad, has been manufacturing coated cotton fabrics in their 2 Units. On 2-4-1981, they had filed a Writ Petition No. 2199/1981 in the H.C. of Andhra Pradesh disputing that the goods did not fall within the scope of the erstwhile Central Excise Tariff Item 19-III. On 3-4-1981 they filed another miscellaneous writ petition 2325/1981 praying for interim order to direct the Asstt. Collector, Central Excise, Hyderabad-II Division and the Collector of Central Excise, Hyderabad not to collect Central Excise duty and to allow removal of the impugned goods from the factory on furnishing security covering the Central Excise duty payable. On 3-4-1981 the High Court directed the petitioners to pay duty under the erstwhile Central Excise Tariff Item 19-I and furnish Bank Guarantee for the balance of Central Excise duty payable under the erstwhile Item 19-III. The Hon ble HC disposed of the Writ Petition No. 2199/1981 and in their order, dated 18-3-1987, directed the Asstt. Collector to dispose of the petitioners objections, if any, raised in this petition, taking also into consideration the class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Rules, 1944. The show cause notice also proposed confiscation of land, building, plant, machinery etc. in terms of Rule 173Q ibid. 2.2 The above SCN was adjudicated by Commissioner, Central Excise, Hyderabad vide his order (original) No. Central Excise 60/97, dated 15-7-1997. The said order in original confirmed a duty demand of Rs. 34,11,365/- (as against the demand of Rs. 90,20,445/- proposed in the SCN) under Rule 9(2) of the Central Excise Rules, 1944 read with the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944, apart from demanding interest at appropriate rate under Section 11AB, ibid, from the main applicant. Penalties were also imposed on the main applicant as well as its Chairman, Shri H. Narasiah and its Managing Directors (Shri Nagendra Rao and Shri H. Kishan) and Directors (S/Shri K. Seshagiri Rao and Vijayakumar Gada). In terms of Rule 173Q(2) of the Central Excise Rules, 1944 confiscation of land, building, plant machinery used in connection with the manufacture, storage and removal of the subject goods was ordered, with an option to main applicant to redeem on a fine of Rs. 25 lakhs. It was ordered that in terms of Rules 221 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e admitted (before this Bench) additional liability of Rs. 15,40,469/-. The applicant was directed to pay the balance amount of Rs. 7,90,469.32 out of the admitted additional duty liability and produce proof thereof. The balance amount was paid through thirteen (13) TR-6 challans on various dates commencing 15-2-2001 to 3-3-2001. 5. Annexure II to the application for settlement indicated, prima facie, that the applicants were conceding the allegations of floating dummy companies and thereby having irregularly availed inadmissible abatement towards trade discount. Accordingly, the question remaining to be settled appeared to be whether from the price at which the impugned goods were sold to the dealers, duty already paid alone should be abated to determine revised assessable value to demand differential duty, or the duty totally payable, including the amount to be demanded, should be abated. Therefore, the Commissioner (Investigation) attached to this Bench was directed to peruse the records to work out differential duty, both in case duty paid alone is to be abated, and in case duty payable is held to abatable. The Commissioner (Investigation) filed his report C.No. V/15/29/2001- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation) of this Bench of the Settlement Commission, inter alia, containing worksheet and differential duty liability, the advocate conceded that the applicant had erred in working out his additional duty liability for the year 1985-86, for which year he deducted 38% from the cum-duty price to arrive at the ex-duty value, while the duty paid and payable during the said year was only 35%, resulting in the aggregate additional duty liability further going up to Rs. 20,30,035/- for all the 3 years. The advocate submitted that he accepted this amount of differential duty, in the interest of settlement of dispute. He accepted to pay the balance after deducting the originally admitted duty liability of Rs. 15,40,469.22 (since discharged) from the presently admitted duty of Rs. 20,30,035/-, within 30 days from the date of final order of settlement by the Bench. 6.1 Shri Manish Mohan, DC, Hyderabad-I, initially objected to adoption of the balance sheets figures of the main applicant, on the ground that the allegation was that the 13 companies floated by it were fictitious, but later conceded that there could be no objection to accept the said balance sheets as evidence, as the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the main applicant, as ex-duty value to be charged to duty, the additional duty liability works out to Rs. 27,61,004.41. The Commissioner Investigation has also reported that taking the price shown in the invoices to the dealers by the 13 parties as cum-duty price, the additional duty liability works out to Rs. 20,30,035.30. He has also reported that for working out the differential duty, the invoices of the respective periods were verified, except for 1985-86, for which period the invoices were not available with the Department as well as the applicant, and that, accordingly, prices prevalent during 1983-84 and 1984-85 were adopted to calculate the differential duty. 7.2 In this context, the Bench observes that taking support from the judgment of the Apex Court in Pravava Pulp Paper Mills v. Collector - 1997 (96) E.L.T. 497 (S.C.), a Larger Bench of CEGAT had decided by a majority decision in the case of Srichakra Tyres Ltd. v. CCE, Madras [1999 (108) E.L.T. 361] that the total duty proposed to be demanded shall have to be abated from the cum-duty price actually received and liable to be received as a consideration for sale of goods. Extracts from Para 9.1 of the above said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35/- worked out by the Commissioner (Investigation) on such abated price. The Bench does take note of the fact that the Commissioner (Investigation) has indicated that the invoices for 1985-86 were not available for verification and that, therefore, the prices of 1983-84 and 1984-85 had been adopted to calculate the differential duty for the said year. However, the Bench also notices that verification has been done by Commissioner (Investigation) for the entire material period also taking into account the discounted (@ 3%) price adopted initially as assessable value and the entire price without abatement of discount charged from the dealers, as reflected in the working sheet to the show cause notice. Therefore, the non-availability of invoices to dealers for the year 1985-86 is immaterial. 8. The Bench observes that the applicants have extended full co operation through out the proceedings and have made a true and full disclosure of duty liability by admitting the entire allegation of incorrect availment of 3% trade discount. Further, though initially they admitted duty liability of only Rs. 15,40,469.22, they had on their own volunteered for a higher duty differential of Rs. 16, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court that the Section 11AC of the Central Excise Act, 1944 is prospective in operation and the illegality committed prior to insertion of Section 11AC in the Act, cannot be the subject matter of penalty under the said provision. 12. Accordingly, in view of the findings as stated above, the case is ordered to be settled in accordance with the provisions of sub-section (7) of Section 32F of the Central Excise Act, 1944 as follows :- (i) The Central Excise duty payable in the instant case is determined as Rs. 20,30,035.30 (Rupees Twenty lakhs thirty thousand and thirty five and paise thirty only). (ii) The applicant shall have to pay the balance of Rs. 4,89,566.08 (Rupees four lakhs eighty nine thousand, five hundred and sixty six and paise eight only) (after adjustment of the deposit of Rs. 7.5 lakhs as per CEGAT s Order and payment made after admission of the application by this Bench), within 30 days from the date of receipt of this Order and produce proof thereof. The attention of the applicant is drawn to sub-section (10) of Section 32F of the Central Excise Act, 1944. (iii) No interest is payable by the applicant, excepting to the extent provided u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
