TMI Blog2012 (1) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976. The abatement of 45% from such MRP is for the purpose of determining the assessable value of ceramic tiles, as provided under the amended Notification No. 13/2002- CE(NT) dated 1.3.2002. It is also averred that as per the Notification No.6/2002-CE, as amended on dated 1.3.2002, those ceramic tiles which are manufactured without the use of electricity attract Central Excise duty at the rate of 8%, provided no Cenvat credit of the duty paid on inputs used, has been availed by the manufacturer. The respondent herein, after availing abatement of 45% of the MRP declared that the Central Excise Invoices, was clearing its excisable finished goods on payment of duty at 8% ad velorum on the value determined. It is averred further in the petition that the intelligence was gathered by DGCEI zonal unit that the respondent No.1 and others engaged themselves in large scale evasion of Central Excise Duty and other taxes by declaring only a part of the actual MRP and, thereby determining the lower assessable value for availing abatement of 45% on such lower MRP. Search operations were carried out at the premises of various manufacturers of tiles at Morbi as well as at the premises of severa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evade the Central Excise Duty. Central Excise Invoices also did not reflect variety of tiles although they manufactured different shades, colours, designs and quality. In the meantime, all the manufacturers of Gujarat including the present respondent increased MRP of tiles manufactured by them and such enhancement of the MRPs for 1.4.2008 to 31.3.2009 was averred to have been done without making any change/quality/design of the tiles. This enhancement with effect from 1.4.2008 was indicative that prior to this date, respondent manufactured and cleared tiles of different varieties, colours, designs but in Central Excise Invoices it showed only general description of tiles. It is alleged therefore that the respondent indulged in large scale evasion of Central Excise Duty by way of gross under-valuation. This substantial increase in MRP without change in quality in post April, 2008 period was further vindicative of the intelligence of DGCEI, as per the version of petitioner. 3. In the aforementioned premise, a show cause notice was issued to the respondent on 30.9.2009 working out the duty at ₹ 44,43,031/- with proposed penalty on the Director of the respondent company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1944 in so far as this case is concerned. 21. The above immunities are granted under Section 32K(1) of the Act. Attention of the applicant and co-applicant is also drawn to the provisions of sub Section (2) and (3) ibid. 22. This order of settlement shall be void in terms of Section 32F(9) of the Act if the Settlement Commission subsequently finds that it has been obtained by fraud or misrepresentation of facts. 23. All concerned are informed accordingly. 5. It is averred in the petition that the full demand of duty liability is not on the basis of actual price (MRP) at which the goods were sold to the dealers and the intelligence gathered by the Revenue was with regard to the small percentage of sale and the same cannot be made the basis for calculation of additional duty liability, particularly, in absence of actual MRP and more particularly when the invoices did not reflect the colours, designs etc. of the tiles. Under such circumstances, the only alternative available was to take weighted average of each variety or group of tiles cleared after March, 2008 when the prices were revised. The weighted average, thus, was taken to give more reliable bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent from prosecution would be available for the present respondent. 9. Heard learned counsel Mr. Darshan Parikh for the Revenue who has seriously challenged the order of the Settlement Commission dated 8.4.2011 passed under Section 32F (7) of the Act. It is submitted by the learned counsel Mr. Darshan Parikh that the reduction of 10% per year as has been done by the Settlement Commission would lead to absurdity of the figure as there would be a substantial reduction of 50% at the end of 5 years and if that year wise reduction is further extended, effect would be of getting a negative sum eventually. He also further urged that it would not only have cascading effect as there are 200 other manufacturers who are waiting on the fence, but, the same would lead to a chaotic situation for the Revenue. He urged this Court to consider the fact that though DGCEI needs to investigate in the allegation of large scale evasion of the tax and duties, the officials were not permitted to do so by the manufacturers, their employees etc. This very attitude, on the part of the manufacturers, which included the petitioner, requires to be deprecated severely and in the wake of these glaring facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... boratories Ltd.(supra), the Apex Court held that so far as the findings of fact recorded by the Commission or the question of facts are concerned, the same is not open for examination either by the High Court or the Supreme Court and the High Court cannot substitute its opinion by holding thus:- 21. An order passed by the Settlement Commission could be interfered with only if the said order is found to be contrary to any provisions of the Act. So far findings of the fact recorded by the Commission or question of facts are concerned, the same is not open for examination either by the High Court or by the Supreme Court. In the present case the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to the imposition of simple interest @ 10 per cent per annum was passed in accordance with the provisions of Rule 14 but the High court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. 22. so far as the second issue with respect to interest on ₹ 50 lacs is concerned, the same being a factual issue should not have been gone into by the High Court exercising the writ jurisdiction and the High Court sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules and other law as referred to in sub-section(1); or (b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. 19. These provisions are meant for valuation of the excisable goods with reference to the retail sale price. What is required of a manufacturer is to declare the retail price of the goods which are governed by Notification in the Official Gazette specifically the retail sale price declared on excisable goods less the amount of abatement as may be declared by the Government by Notification in the Official Gazette. Thus in other words, after deduction of the abatement, as may be declared by the Government, on the excisable goods, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as manufactured and removed identical goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods: (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture: Provided that if more than one retail sale price is ascertained under clause (i) or clause(ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. 21. It would be also relevant at this stage to make a mention of notification No.13/2002-CE(NT) dated 1.3.2002 which is a notification in exercise of the powers conferred under Section 4A for allowing the abatement of 45% from MRP for determining the assessable value of Ceramic tiles. Ceramic tiles manufactured without availing Cenvat credit paid on input and manufactured in a factory without electricity at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Differential duty (8% + 2% +1%) (Rs.) 1 2 3 4 5 6 Comm. 38762 180 to 378 424 (466) 30,71,221/- 2,53,069/- Comm. J. Mer. 95 365 408(450) 2,304/- 190/- Comm. J. Cott. 188 365 716(788) 36,331/- 2,994/- Ecco. 17213 150 to 260 268(295) 4,61,419/- 38,021/- P.G. Tcotta 102 875 886(975) 638/- 53/- P. Gold GY 79 875 882(970) 296/- 24/- P. Gold GM 1319 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 31.03.2008( SCN MRP x 100/110) (Rs.) Difference in the assessable value for the purpose of calculating differential duty (Rs.) (applicant) Differential duty ( 8% + 2% +1%) (Rs.) 1 2 3 4 5 6 Comm. 500 450 424(466) 4400/- 363/- Ecco. 38 280 268 (295) 314/- 26/- P.G. Tcotta 30 900 886 (975) 1,238/- 102/- P.Gold JM 362 1035 968(1065) 5,973/- 492/- PRM Gold 480 665 651 (716) 13,464/- 1109/- 45424 700 651 (716) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to take a lenient view as far as the request for immunities are concerned. 14. It emerges thus from the record that the officers of the petitioner department conducted the search of premises of the dealers, manufacturer, angadias etc. and also recorded the statement on the basis of which it issued the show cause notice leaving differential duty of ₹ 44,43,031/- including demand of additional interest and penalty. 15. It appears thus to have admitted, initially, liability only to the tune of ₹ 3,56,422/- and interest of ₹ 97,497/-. However, subsequently, when the Revenue made its stand clear, it enhanced the said liability to ₹ 21,31,941/- with interest of ₹ 7,40,438/. According to the Revenue, the respondent No.1 has not made full admission of the duty liability by not disclosing the actual MRP and the goods were sold to the dealers in the period under challenge. Therefore, only alternative with the Revenue was to work out the weighted average of each variety of grade of tiles cleared after 2008 when the prices were revised. It is noted by the Revenue that invoicing pattern gave details of the tiles cleared after March, 2008 and weighted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ventually this reduction could bring weighted average MRP to nil and it would result into ridiculous preposition. As the policy adopted by the Settlement Commission is neither legal nor in any manner conducive to the object of the Act and as the same is challenged by both the sides and as fallacy of reasoning had been well made out, we are of the firm opinion that this entire basis cannot be sustained and the same needs to be set aside. In this premise, the order of the Settlement Commission shall have to be quashed in these proceedings. We are conscious of the decision of the Apex Court given in case of Union of India vs. Ind-swift Laboratories Ltd. (supra) that findings of facts recorded by the Commission or questions of facts are concerned, the same are not open to examination by the High Court. However, the same can be interfered with when order is contrary to the provision of the Act. Having found the order of Settlement Commission contrary to the settled principles and provisions of law, the same is being interfered with. 27. Of course, the Court shall not substitute its reasonings nor will it enter into the arena meant for the Settlement Commission on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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