2006 (6) TMI 435 - Commission - Central Excise

Summary

Issues: Settlement of duty liability under the Central Excise Act, 1944; Application for waiver of penalty and prosecution; Calculation of duty based on rate of duty applicable; Immunities from penalty, prosecution, and interest.

The judgment pertains to an application filed by M/s. Bhuwalka Steel Industries Ltd. seeking settlement under Section 32E of the Central Excise Act, 1944, for alleged clandestine removal of CTD Bars without payment of duty. The Show Cause Notice demanded differential duty and education cess, along with penalties and interest. The applicant contested the duty amount, citing the correct rate of duty as 12% ad valorem, contrary to the department's calculation at 16% ad valorem. The applicant argued for cum-duty benefit and a lower excisable value per MT, leading to a reduced duty liability of Rs. 1,40,36,040. The applicant also sought immunities from penalty and prosecution, emphasizing the already deposited amount of Rs. 1,50,00,000. The Bench noted discrepancies in the department's calculations and granted the settlement at the reduced duty liability, with immunity from interest exceeding 10% per annum, penalty, and prosecution for the main applicant and co-applicants.

The Bench analyzed the submissions and records, observing that the duty demand was contested due to the rate of duty applied and the lack of cum-duty benefit in the quantification. The department relied on a circular for the rate of duty, but the Bench found the applicant's argument valid based on factual discrepancies. By considering the average excisable value per MT for each month and the correct rate of duty, the duty liability was recalculated to Rs. 1,40,36,040. The Bench favored immunities from penalty and prosecution for all applicants but declined waiver of interest, citing the payment made towards duty evasion. The settlement was finalized based on the recalculated duty liability, granting immunities under Section 32K of the Central Excise Act, 1944, subject to withdrawal if any material particulars were withheld or false evidence provided during the settlement process.