2002 (5) TMI 300 - Commission - Central Excise

Summary

Issues:
Settlement of duty liability under Central Excise Act, 1944; Benefit of cum duty price in determining actual duty payable; Immunities from penal liability and interest under the Act.

Settlement of Duty Liability:
The judgment involves applications for settlement of duty liability by M/s. Malt Manufacturers Pvt. Ltd. and M/s. Alwar Malt Manufacturers Pvt. Ltd., along with their Managing Director, Major O.P. Yadav, in relation to a show cause notice issued by the Commissioner of Central Excise, Jaipur. The applicants admitted a total duty liability of Rs. 68,27,883/- as against the demand of Rs. 78,32,650/- in the show cause notice. The Commission allowed the applications to proceed under Section 32F(1) of the Act and permitted the payment of admitted duty amount in six equal monthly installments. The Commissioner (Investigation) verified the duty payable, concluding it to be Rs. 77,90,046/- without considering cum duty price and Rs. 68,28,902/- if cum duty price was taken into account.

Benefit of Cum Duty Price:
The applicants requested the benefit of cum duty price in determining the actual duty payable, citing the case of M/s. Maruti Udyog Ltd. and M/s. Srichakra Tyres. They argued that the price charged to customers should be treated as cum duty price, following the Larger Bench decision of CEGAT in the case of Srichakra Ltd. The Advocate highlighted that the Supreme Court upheld the decision, emphasizing that the price charged was the sole consideration for sale. The Commission agreed with the applicants, granting them the benefit of cum duty price under Section 4(4)(d)(ii) of the Act.

Immunities from Penal Liability and Interest:
The judgment addressed the issue of immunities from penal liability and interest under the Act. The Commission found that the case involved interpretation of relevant provisions rather than fraud or forgery. It noted several factors in favor of the applicants, such as common facilities used by both units and lack of objection from Excise Department officials. Consequently, the Commission granted the applicants immunity from prosecution for offenses under the Act and full immunity from penal liability, fine, and interest leviable under the Act and Rules for the matters covered by the applications.

Conclusion:
The judgment ordered the applicants to deposit the balance duty of Rs. 1,019/- within 30 days. It granted immunity from prosecution and penal liability, fine, and interest under the Act. However, it emphasized that the settlement would be void if obtained through fraud or misrepresentation of facts, highlighting the provisions of section 32K of the Act regarding immunities granted under the order.