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TMI Blog2002 (5) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... Anti Evasion Wing of Central Excise Commissionerate, Jaipur-II, visited the factory premises of the assessee on 21-6-2000 and conducted checking of the statutory records as well as private records maintained by the assessee, besides conducting physical verification of the stocks and the raw materials and finished goods lying in the factory premises and found an excess stock of 27,214 kg. of Aluminium Wire Rods over and above the recorded balance, lying in the factory premises. 4. During the course of further investigation, the department found that the Applicant M/s. Prem Cables Pvt. Ltd. had not paid Central Excise Duty, on the price variations allowed, in respect of the tender notices/purchase orders of the Rajasthan State Electricity Board (RSEB), though the same had been claimed/reimbursed by M/s. RSEB to them including the Central Excise duty element. 5. On the basis of investigations, carried out the department issued a Show Cause Notice, demanding a duty amount of Rs. 70,75,546/- alleging that the assessee had wilfully suppressed the facts from the department, with an intention to evade the payment of duty. The Show Cause Notice, also proposed the confiscation of the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Electricity Boards and had failed to pay the duty on these amounts. The Revenue brought to the notice of the Bench, that although a bond was executed by the Applicant in 1985, the Revenue records show that this bond was discharged in 1997 and thereafter all assessments were final and not provisional. The Revenue contended that unless the Applicant, on receipt of extra amounts informs the Department, by paying duty of these amounts, the Department would not have come to know about these extra amounts. However, the Department, had no objection to the admission of the Application, by the Commission, in light of the admitted duty liability by the Applicant. In light of this, the matter was admitted. 11. From the foregoing, it would emerge that there are two basic issues, arising in this matter, which have to be settled by the Commission. They are as under :- (a) Additional duty that would be due from the Applicants, in terms of the escalation clauses, in their supply agreements, with the RSEB and other State Electricity Boards, in respect of the duty collected by them and neither reported by them to Revenue nor paid by them, and (b) The differential duty leviable and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Bhadur, Factory gate man, who handed over the relevant invoices and LRs of the said goods to him. Regarding uncovered excess quantity of 9,195 kgs. of aluminium wire rods, Shri Jain admitted that it could be because of short recording of production of aluminium wire rods manufactured by them from aluminium scrap due to error in weighing scale. The statement of Shri Jain was not corroborated by the statement of Shri Yam Bhadur who in his statement dated 13-7-2000 (copy enclosed) has admitted that on 21-6-2000 he had received only documents of the consignment which were handed over by him to Shri S.L. Jain and the goods relating to the said documents were actually received in the factory on 23-6-2000. Shri S.L. Jain, Manager in his statement has confirmed the version of Bhim Bhadur dated 13-7-2000. On being asked about the excess stock Shri Jain admitted that they had manufactured the said aluminium wire rods from aluminium scrap in their factory and entries of the production was not made in the RG-1 register. From the above it is apparent that Shri S.L. Jain, Manager (Sales) initially tried to cover the excess goods by making a false story by way of taking the shelter of the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdictional Range Superintendent, but the claims received under the price escalation under these tenders have not been disclosed by the assessee to the department all along. 15. The final hearing was held on 20-3-2002. At the very outset the Advocate for the Applicant prayed for waiver of interest and grant of immunity from imposition of fine, penalty and prosecution in the case. He informed the Bench that the Applicants have deposited the full amount of admitted duty liability of Rs. 70,75,546/-. 16. It was also argued for the Applicant that the company was engaged in the manufacture of aluminium wire rods, aluminium conductors and was supplying the aluminium conductors to various State Electricity Boards. It was further stated that in all their contracts there was a price variation clause on the basis of which the Applicants used to raise bills against the Electricity Boards and that the Revenue was fully aware of the contracts as all the contracts were filed with them. It was further agitated that the company started its business in 1964 and since then, it had been paying duty, as per law. Therefore, it was contended that the proposal to impose penalty by the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n SCN, the Applicants had suppressed the facts from the Department and collected differential value of amounts from various Electricity Boards, without payment of the differential Central Excise duty, leviable on the differential value. 20. On an inquiry from the Bench, the Advocate for the Applicant stated that they have changed the procedure, since filing of price list was abolished in 1994, and therefore, they had discontinued the earlier practice. 21. The Bench inquired from Revenue whether the bond filed by the Applicant was perpetual or otherwise and whether a Bank Guarantee was filed by the Applicants and whether it had been encashed or otherwise. The representative of the Revenue replied that the bond was not a perpetual bond. It has further been confirmed by Revenue that the Bank Guarantee submitted by the Applicant, at the time of provisional release of goods, had not been encahsed by the Department. 22. The Revenue has further furnished a copy of letter No. CE-22/Pali/Bond/96/2435-36, dated 28-1-97 showing receipt of B-13 Bond released to the Applicant, on 28-1-97. The original B-13 Bond submitted by the Applicant, in 1985, it was stated by the Revenue, is not avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial duty on the enhanced values, received by the Applicants, from the RSEB and other Electricity Boards, from time to time, from the dates the payments were due, to the dates actual payment was made to the Department. The Applicants were directed by the Commission to work out the same and to furnish a copy to Revenue, so that Revenue could verify the same, from their records and comment on whether the same, was in order, or not. 26. The Applicants have worked out the total interest liability, on the basis of 10% simple interest p.a. totalling to Rs. 23,56,717/-. The Revenue on the other hand has contended that the chart prepared by the Applicants, in this regard reveals that after the price variation letter is issued by the RSEB, they grant the rate approval, on a particular date. After this approval, RSEB takes 3 to 6 months, for release of payment. Therefore, the Applicants have added three months period, from the date of approval and have taken that date, as due date, for paying Central Excise duty, to the Department and have calculated the interest amount @ 10% p.a. till the payment was made to the department. This they have pointed out was done due to lack of data as to when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provision of Section 32K of the Central Excise Act, 1944 as well as from prosecution under the said Act. 31. The case is settled on the following terms:- (i) Payment of full amount of demand for duty of Rs. 70,75,546/- in terms of Show Cause Notice, which has already been paid by the Applicant. (ii) The Applicant shall pay interest on the deferred payment to the extent of Rs. 25,01,146/- within 30 days of receipt of the copy of this order and shall produce proof of payment thereof, in the form of a certificate, from the Jurisdictional Central Excise authority certifying receipt of payment. (iii) The Applicants are granted immunity from prosecution for offences committed under Central Excise Act, 1944 and from penalty and fine under the Central Excise Act and Rules made thereunder, in full, in respect of this case, covered by the Application in question. 32. Attention of the Applicant is drawn to sub-section (9) of Section 32F of the Act. The settlement arrived at, under this order, shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud, or mis-representation of the facts. 33. Attention of all conce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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