TMI Blog2003 (9) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... s from banks. For this purpose, the applicant has been issuing proforma invoices to enable the customers to obtain loans from banks. The applicant purchased the input materials/components and manufactured and supplied the products very often in excess of the quantities accounted for in the statutory records and such removals admittedly were without payment of duty. The applicant had also removed some of the input materials on which proforma credit was availed without reversing the credit taken. 2. The Central Excise authorities visited the factory and other premises of the applicant on 1-5-81 and carried out detailed investigation for verifying certain documents and examining goods. As a result of such investigation, a SCN was issued on 5-10-81 alleging non-payment of duty on various products manufactured or removed without entering the same in the statutory records. The SCN was basically in two parts - one was for clandestine removal of goods and carried a demand of duty amounting to Rs. 1,28,21,328/- and the second part was for under valuation of the goods already cleared legally on payment of duty and this duty demand amounted to Rs. 44,58,176/-. The case was adjudicated by Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of such removal, he has contended that he is liable to pay duty at the prevalent rate only for the clandestine removals on and from 11-4-81. As regards, the second limb of the SCN which is regarding the question of undervaluation of some of the goods, a charge dropped even by the adjudicating authority, he submitted that the Department has not appealed against that portion of the order dropping the charge, nor any cross-objection was filed even during the appeal proceedings before CEGAT. By applying the doctrine of merger, res judicata will apply, inasmuch as the Department has not filed any appeal under Section 35E of the Central Excise Act. According to the ld. Advocate, therefore, the issue relating to the alleged undervaluation does not at all survive. In view of the CEGAT s order what is now pending for settlement is a truncated show cause notice and not the original notice. He supported his arguments by placing reliance on the following judgments : (1) 1967 (65) ITR 252; (2) 1978 (112) ITR 257 (GAU); (3) 2000 (116) E.L.T. 422 (SC). 6. The representative of Revenue read out a note and submitted a copy of the same. On a query from the Bench, he clarified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing recourse to any of the provisions of Rule 9A. It is respectfully submitted that the provisions of Section 32E only require the assessee to disclose his duty liability which was not disclosed before the jurisdictional Central Excise Officer. When it refers to disclosure of duty liability, it obviously refers to the facts relating to the clearance, the value of the clearances and the corresponding duty liability. However, as to what would be the rate at which the duty has to be paid, is not coming within the ambit of Section 32E. That aspect of the matter will be still governed by the provisions of Rule 9A of the Central Excise Rules. The provisions of Section 32E are not in any manner overriding any other provisions of the Central Excise Act or the Rules relating to levy, collection and payment of excise duty. This disclosure of the duty liability referred to under Section 32E would always be in accordance with and in consonance with the provisions of Central Excise Act and the Rules relating to levy, collection and payment of excise duty. Therefore, it is our respectful submission that when the full facts relating to clearance of the goods have been admitted and when the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions relating to the Income-tax Settlement Commission as the same are in many ways similar to the provisions for the Customs and Central Excise Settlement Commission. The section corresponding to Section 32E of the Central Excise Act is Section 245C of the Income-tax Act which runs as follows : 245C. (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the (Assessing) Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided. 12. It is interesting to note that what Section 245C contemplates is the full and true disclosure of income and not income-tax , whereas Section 32E the Central Excise Act contemplates full and true disclosure of duty liability. Had the wordings of Section 32E referred to full and true disclosure of clearances , as against the duty l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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