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TMI Blog2002 (5) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... ). In the declarations filed on 4-4-1994 and 30-4-1995 for the year 1994-95 and 1995-96, the applicant had declared that his clearances would be below Rs. 30 lakhs (excluding the clearances made by him by availing the benefit of exemption Notification No. 202/88 for the said periods). As per the investigation carried out by the officers of Central Excise on the basis of the intelligence about suppression of production and clandestine clearance, it was noticed that the applicant was evading the payment of Central Excise duty by procuring the raw material in the names of other fictitious traders. The finished products manufactured by the applicant were removed as trading goods by using trading sales invoices of M/s. Janata Steel Traders (the applicant s own trading firm). The Show Cause Notice, inter alia, among other things asked the applicant to show cause as to why (i) C. Excise duty amounting to Rs. 39,40,861/- payable on the excisable goods (as detailed in Annexures A and B to SCN) unauthorisedly manufactured and illicitly cleared by him should not be demanded and recovered and (ii) C. Excise duty of Rs. 24,806/- on the excisable goods seized from M/s. Shalin Corporation, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained by Shri J.I. Bafna. (iii) The charges levelled for the period 1-4-1994 to 19-11-1994 in the show cause notice were baseless and were without any evidence. (iv) Sales made by M/s. Janata Steel Traders during the period 1-4-1994 to 19-11-1994 were second sale of the goods purchased by M/s. Janata Steel Traders from different traders. During the said period M/s. Janata Steel Traders did not sell the goods manufactured by the applicant. In fact, the applicant had no raw material for excess production and clandestine removal. (v) The applicant removed the goods without payment of Central Excise duty only from 19-11-1994. The submissions of the Revenue, inter alia were as under :- (1) The amount of duty quantified in the show cause notice was correct. (2) Private note book detailing purchase of raw-materials in cash seized from the residence of Shri J. I. Bafna was the crucial evidence along with the seized sales invoices from M/s. Janata Steel Traders. 6. After hearing both, the Applicant and the Revenue, the Commission asked the ld. Advocate of the applicant to submit the evidences to substantiate the applicant s claim of genuine trading by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant claims the deemed credit of Rs. 23,45,006/- as per the Central Government s order under Rule 57G(2), @ Rs. 920/- per M.T. on 2,548.920 MTs of re-rollable scrap used during the period 1-4-1994 to 31-3-1995 for production of MS round bars falling under Chapter 72 of Tariff. Thus, the applicant was liable to pay a net duty liability of Rs. 8,72,334/- only. 14. The ld. Advocate for the applicant also cited the following judgments of the Supreme Court and Tribunal in support of his arguments regarding availment of deemed credit as well as his claim for calculation of duty on cum duty value basis - . 1. 1999 (106) E.L.T. 3 (S.C.) - Eicher Motors Ltd. v. U.O.I. 2. Collector of C. Excise and Customs, Cochin v. Premier Tyres Ltd. - 2001 (130) E.L.T. 417 (Ker.). 3. Collector of C. Excise Coimbatore v. Venkateswara Steel Industries -1996 (86) E.L.T. 446 (Tribunal). 4. CCE, Coimbatore v. Shri Rajaganapathy Steel Coimbatore - 1998 (102) E.L.T. 95 (Tribunal). 5. Collector of C. Excise, Chandigarh v. Garg Steel and Alloys Inds. - 1998 (102) E.L.T. 329 (Tribunal). 6. Pareek Ferro (P) Ltd. v. Commissioner of C. Excise, Bhubaneswar - 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cum duty price under Section 4(4)(d)(ii) and deemed Modvat credit for the inputs used during 1-4-1994 to 31-3-1995. He submitted that by various decisions the Hon ble CEGAT held that even in the cases where there was suppression of facts, wilful misstatement etc. on the part of an assessee Section 4(4)(d)(ii) was applicable. Even in the case of clandestine removal an assessee could claim benefit under Section 4(4)(d)(ii). The Commission asked him whether there was any decision of the High Court or Supreme Court in the matter. He replied that for clandestine removal there was no decision but for non duty payment cases there were certain decisions. The Commission drew his attention to Sections 11D, 12A and 12B of Central Excise Act, 1944. The Learned Advocate submitted that the applicants had not collected any duty from the buyer therefore Section 11D would not be applicable to them. The Commission asked him to justify his arguments. He further submitted that since the transactions were already concluded they were not in a position to collect the duty from the buyer any more. 22. It was further submitted that the applicant has already accepted the entire duty liability of Rs. 39, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing reasons :- 1. The value realised from the clandestine sale of the product shall be deemed to be cum duty price and consequent reduction in duty thereof. 2. The Applicant has claimed benefit of deemed credit @ Rs. 920 per M.T. under the erstwhile Rule 57G(2) of the Central Excise Rules, 1944 and calculated the amount as Rs. 23,45,006. 3. The applicant had claimed a reduction in duty liability on the melting loss at 20% of the final product and consequent deemed credit thereon. 26. The contention raised by the Applicant and the Learned Advocate have been examined by the Commission. The Commission at the time of admission has also drawn the attention of the Learned Advocate to the provisions of Section 32K of the Central Excise Act, 1944 in relation to true and full disclosure for purpose of getting immunity from the Commission. This fact was also mentioned in course of final hearing, so that a satisfactory settlement is arrived at. Since the Learned Advocate has not conceded the aforesaid two issues at serial Nos. 1 2 supra while conceding the issue at 3 supra, a detailed deliberation on each is called for. The Commission finds, that on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the parties, on the facts of this case, we are of the opinion that the stand of the respondents is correct. Various calculations have been made and we have taken into consideration the subsequent price which has been approved by the Department with effect from 8-10-1992 and it clearly appears to us that the revision of the price was cum duty and, therefore, the element of duty in the increased amount had to be deducted. The appeals are dismissed. No costs. The Apex Court had an occasion to examine the said issue of cum duty price in the case of Commissioner of Central Excise, Delhi v. Maruti Udyog Ltd. reported in 2002 (141) E.L.T. (3) (S.C.), the Hon ble Court in Para 5 has observed as below : A reading of the aforesaid Section clearly indicates that the wholesale price which is charged is deemed to be the value for the purpose of levy of excise duty, but the element of excise duty, sales tax or other taxes which is included in the wholesale price is to be excluded in arriving at the excisable value. This Section has been so construed by this Court in Asstt. Collector of Central Excise and Others v. Bata India Ltd., 1996 (4) SCC 563, and it is thus clear that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 1/93-C.E., Ministry s Order No. TS/36/94/TRU dt. 1-3-1994 issued under Rule 57G(2) of the erstwhile Central Excise Rules, 1944 and also the contrary decision taken by the Tribunal in the case of Collector of Central Excise, Coimbatore v. Venkateswara Steel Industries reported in 1996 (86) E.L.T. 446 (Tribunal) and thereafter it has held that : the re-rollers, whose aggregate value of clearances in the financial year had exceeded Rs. 75,00,000/- and when they were paying the applicable rate of excise duty on the clearances beyond the value limit of Rs. 75,00,000/- were not eligible for the benefit of Ministry s Deemed Credit Order No. TS/36/94 TRU, dated 1-3-1994. In view of this, the contention of the Applicant in relation to availment of deemed credit, is not admissible. 29. Considering the facts and circumstances of the case the terms of settlement are as follows: 1. Duty of Excise : The case is settled for an amount of Rs. 32,72,340/- as duty of excise after allowing the abetment towards cum-duty value. The applicant had paid an amount of Rs. 1,48,114/- on 19th March, 22nd March and 23rd March of 2001. The applicant had not paid the balance amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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