TMI Blog2011 (3) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed by the Settlement Commission and the rational behind imposition of such penalty. The power given to the Settlement Commission, unless exercised in violation of the provision of the Act, cannot be challenged and the petitioners’ plea on the above issue fails. - 4410, 1544, 3346 , 3347 of 2008 - - - Dated:- 17-3-2011 - R. Sudhakar, J. REPRESENTED BY : S/Shri V.C. Janardhanan, Mohammed Shaffiq for M/s. S.G.R.M. Palaniappan and K. Magesh, for the Petitioner. Shri K. Ramakrishna Reddy, SCGC, for the Respondent. [Order (Common)]. All the four Writ Petitions are filed praying to issue a writ of Certiorari, calling for the records comprised in the impugned Final Order No. 55/2007-C.E., dated 6-9-2007 [2008 (224) E.L.T. 169 (Sett. Comm.)] insofar as imposition of personal penalty on the respective petitioners on the file of the first respondent and quash the same. 2. The relief sought for in all the four writ petitions is one and the same. Hence, by consent of both parties all the four writ petitions are taken up together and disposed of by this common order. 3. Four writ petitions have been filed, one by the company and the other three by the Directors an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same towards their duty liability on their clearances made in DTA to electricity Board/Concerns, without payment of Central Excise duty. 15.0 Summary : 15.1 From the investigations conducted against MPTEL, it therefore appears that : * MPTEL is an 100% EOU having their factory premises at No. 84 Akashpattu Village, Vanur Taluk, Villupuram District and were engaged in the manufacture of ACSR conductors etc.; * MPTEL have procured raw materials such as aluminium rods/ingots, steel wires etc., required for the manufacture of ACSR conductors, without payment of excise duty under C.T.3 certificates availing the concession extended to 100% EOUs; * MPTEL have not made any exports of manufactured goods from their factory, but have used the duty free raw materials for the manufacture of ACSR conductors, which were cleared in DTA, i.e., to various State Electricity Board/Concerns; * MPTEL have cleared the manufactured goods under commercial invoices, by charging excise duty and have collected excise duty, which was not remitted to Government exchequer; * The IONS and other correspondence between the personnel of MPTEL have clearly unearthed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods without the cover of proper Central Excise invoice, as required; iv. Rule 100F of erstwhile Central Excise Rules, 1944, Rule 17(3) of Central Excise (No. 2) Rules, 2001 Rule 17(3) of Central Excise Rules, 2002 in as much as they failed to furnish the details of their transactions involving clandestine removals in the periodical returns filed by them; 17.0 By their above-detailed acts and the consequential contravention of the Rules ibid, MPTEL appear to have evaded payment of payable Central Excise duties on the ACSR conductors manufactured and cleared by them in DTA to various State Electricity Board/Concerns during the period from 1999-2000 (from March 2000) to 2001-02 (upto March 2002) in the manner detailed above. 7. Consequently, the Department in its show cause notice alleged evasion of Excise Duty as hereunder and also proposed the levy of penalty :- 20.0. In view of the foregoing it appears that MPTEL are liable to : i. pay Central Excise duty totally amounting to Rs. 2,76,46,994/- (as detailed in Annexure-D) on the manufactured ACSR conductors removed to TNEB, HVPNL, RRVPNL APTRANSCO during the period from 1999-2000 (from March 2000) to 2001- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 1944 and under Rule 26 of Central Excise (No. 2) Rules, 2001 Central Excise Rules, 2002. 22.0 Similarly, Shri B. Muralidhar, Special Director of MPTEL, Shri A.S. Dumenil, President, Ms. Subhadra Kunduri, Head-Corporate Planning of MPTEL have concerned themselves in organizing the manufacture and clearance of ACSR conductors without payment of duty by MPTEL. The IONs issued by Shri Dumenil detailing the misdeeds committed by MPTEL in clandestine removal of MPTEL and Ms. Subhadra signing the packing slips for goods consigned to APTRANSCO have all appears to indicate their involvement in the affairs of MPTEL. It therefore appears that Shri B. Muralidhar, Sri Dumenil and Ms. Subhadra have dealt with excisable goods which they knew and had reason to believe that they were liable for confiscation and thus have rendered themselves liable for penalty under Rule 209A of the erstwhile Central Excise Rules, 1944, Rule 26 of the Central Excise (No. 2) Rules, 2001 read with Section 38A of the Central Excise Act, 1944 and Rule 26 of the Central Excise Rules, 2002. 9. The petitioner company and the individuals were called upon to show cause as to why duty and penalty should not be levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Central Excise, Goubert Avenue, Beach Road, Pondicherry-605001 ( the adjudicating authority ) within 30 (thirty) days from the date of receipt of this notice as to why penalty should not be imposed on him under Rule 209A of erstwhile Central Excise Rules, 1944 and Rule 26 of Central Excise (No. 2) Rules, 2001 Central Excise Rules, 2002 for contravening the provisions of Central Excise Act, 1944 and Rules thereunder as detailed in foregoing paras. 11. The case was adjudicated by the Commissioner of Central Excise and by order dated 28-11-2005 in (C.No. V/ch.74/15/52/2004-Cx.Adj.) Order-in-Original No. 18/2005, the Commissioner came to conclusion that the petitioner company has manufactured ACSR conductors evade payment of Central Excise Duty. The clearance was made under commercial invoices and not under invoices prescribed for EOU. The clearance has not been acknowledged in the statutory accounts and the petitioners have failed to furnish the same to the Central Excise Department in the prescribed form. The petitioners also collected the excise duty under the commercial invoice and failed to deposit to the revenue account. 12. The petitioner was engaged in ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wingly signed the packing slips for goods consigned to APTRANSCO. None of these individuals have put forth any denials against the allegations nor come forward with any evidence to contradict the findings narrated in the notice. Therefore, their roles in the clandestine removal of ACSR Conductors by MPTEL during the period from March 2000 to March 2002 stand proved beyond any doubt. Therefore they are liable for penalty under Rule 209A of the Central Excise Rules, 1944 and Rule 26 of the Central Excise (No. 2) Rules, 2001 and central Excise Rules, 2002. 27. In view of the above discussions, I pass the following order ORDER (i) I confirm Central Excise Duty of Rs. 2,76,46,994/- (two crores seventy six lakhs forty six thousand nine hundred and ninety four) demanded from MPTEL relating to the ACSR conductors removed (to TNEB, HVPNL, RRVPNL APTRANSCO) during the period from 1999-2000 (from March 2000) to 2001-02 (upto March 2002) under Rule 9(2) of the Central Excise Rules, 1944 and under Rule 17(1) of the Central Excise (No. 2) Rules, 2001 and Central Excise Rules, 2002 read with proviso to Sec. 11A(2) of the Act. (ii) I appropriate the amount of Rs. 50 lakhs (fifty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd paid the same in instalments and there is no dispute on this. The adjudicating authority on his part proceeded to adjudicate the case as above as there was no stay of proceedings. The Settlement Commission, however, on the basis of the application filed proceeded to decide the matter on the basis of the pleadings of the petitioner and the stand of the department independently and passed orders from time to time admitting the case and granting time for payment of admitted liability. 14. The Settlement Commission after considering the stand of the petitioner and that of the Department, came to the conclusion that the benefit of notification No. 8/97 can be extended to illegal clearance made by the applicant, an export oriented unit in respect of DTA sales even though it is done without permission. The relevant portion of the order reads as follows :- The main point to be decided by the Bench is as to what rate of duty should be applicable to the clearances made by the applicant, i.e., whether the duty chargeable should only be the Central Excise Duty in terms of notification No. 8/97-C.E. or it should be customs duty applicable in terms of proviso to Section 3(1) of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for penalty have collected duty from the customers for goods removed on DTA sales to various Government agencies. However, they failed to deposit the same to the revenue and that is the serious offence and the company has enjoyed the financial benefits by not paying the same to the revenue promptly and therefore, penalty is leviable. 16. Insofar as co-applicants is concerned the Settlement Commission was of the view that they cannot escape from the penalty for the illegal clearance already made, particularly, in view of their statement of admission of clandestine clearance and evasion of duty. Since the duty liability has been fully discharged and the case was settled in terms of sub-section (7) of Section 32F of Central Excise Act, 1944, the Settlement Commission passed the following order :- ... since the amount of duty liability had been discharged in full, the case is settled finally in terms of sub-section (7) of Section 32F of Central Excise Act, 1944, under the following terms and conditions :- (i) The duty amount is settled at Rs. 89,58,604/-. Since the same has been paid by the applicant, no further amount remains to be paid by the applicant. (ii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice nor the order of the Commissioner specified which particular clause of Rule 173-Q had been allegedly contravened by the appellant. We are of the view that the finding of the Tribunal is correct. Rule 173-Q contains six clauses, the contents of which are not same. It was, therefore, necessary for the assessee to be put on notice as to the exact nature of contravention for which the assessee was liable under the provisions of Rule 173-Q. This not having been done, the Tribunal s finding cannot be faulted. The appeal is, accordingly, dismissed with no order as to costs. He submits that as in that case referred to above, the exact nature of contravention under the relevant rule has not been discussed by the Settlement Commission and therefore, the imposition of penalty is bad. Petitioners also rely upon the decision cited at the time of admission, rendered by the Bombay High Court in V. Ananthraman v. Union of India reported in 2003 (151) E.L.T. 278 (Bombay). In that case, the Rule 209A of erstwhile Central Excise Rules, 1944, which relates to levy of penalty was considered and held that the revenue had not made out a case for imposition of penalty. It is, therefore, contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es shall, where no other penalty is provided herein or in the Act, be punishable with a penalty which may extend to five thousand rupees and with confiscation of the goods in respect of which the offence is committed. 21. Rule 209A of the Central Excise Rules, 1944 provides for levy of penalty not exceeding to the duty on the goods liable for confiscation. In the same manner Rule 26 of the Central Excise Rules, 2002 provides for levy of penalty not exceeding the duty on the goods in respect of contraventions which makes the goods liable for confiscation under the Act. Rule 27 of the Central Excise Rules, 2002 provides for general penalty. This provision has been invoked in the show cause notice and based on the show cause notice, the petitioner has filed the application for settlement. 22. In terms of Section 32F(7) of the Central Excise Act, 1944, the Settlement Commission after examination of the records and report of the Commissioner of Central Excise received under sub-section (1) and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under sub-section (6) and after giving an opportunity to the applicant and to the Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who made the application for settlement under section 32E has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also either wholly or in part from the imposition of any penalty, fine and interest under this Act, with respect to the case covered by the settlement : Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 32E. 24. Section 32M of the Central Excise Act, 1944 makes the order of Settlement to be conclusive :- SECTION 32M. Order of settlement to be conclusive :- Every order of settlement passed under sub-section (7) of section 32F shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Settlement Commission. The order passed is well within its jurisdiction. 28. Coming to the case relied upon by the learned counsel for the petitioners in the case of V. Ananthraman v. Union of India reported in 2003 (151) E.L.T. 278 (Bombay), it is the case where the classification of the goods was the issue. It was not the case of the revenue in that case that there was clandestine removal of goods. The Department s case in that show cause notice, there was no allegation that the department had reason to believe that the person was involved in acquiring possession of or in any way concerned in transporting, removing or selling the goods, which he knew or had reason to believe are liable for confiscation under the Act or the Rules. The Court was of the view that in a case where the revenue did not contend clandestine removal of goods, the question of invoking penal provisions against the petitioner was bad. That is not the case in hand, as admittedly, the company and the persons concerned in the present case were charged for an offence of manufacturing and clandestine removal of excisable goods contrary to law and collection of excise duty from the customers which was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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