9911796707
TMI Blog2011 (3) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Settlement Commission, the first respondent. 4. The brief facts in all the four cases are as follows :- Petitioner company is engaged in manufacture of Aluminium Conductor Steel of various types falling under Chapter Heading 7406 of Central Excise Tariff Act, 1985. Petitioner company is 100 per cent Export Oriented Unit (EOU in short). The Directorate General of Central Excise intelligence on reasonable belief and information made a search of the petitioner company on 14-10-2003 at the factory and corporate office premises at Pondicherry and Chennai. Documents were seized and mahazar was drawn. Statements were recorded from Senior President, Special Director, the promoters of the company and other personnel like President, Head-Corporate Planning, Excise in-charge, said to be involved in the affairs of the company. After perusal of the documents seized and on the basis of the investigation and the statements recorded, the department was of the view that the petitioner company, a 100 per cent EOU did not make any export and has procured raw materials without payment of duty availing the concession extended to 100 per cent EOU. The duty free raw materials were us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; The IONS and other correspondence between the personnel of MPTEL have clearly unearthed the modus of illicit manufacture and removal of goods; * The procurement of raw materials under C.T.3 certificates without payment of duty, manufacture of goods at the factory premises of MPTEL were evident from the documents seized from Corporate Office and factory premises of MPTEL; * The substantial consumption of electricity at the factory premises of MPTEL appears to confirm the production of goods carried out by MPTEL; * All the customers of MPTEL have furnished the documents relating to their entire transactions with MPTEL, which appears to confirm the clandestine manufacture and removal of goods by MPTEL; * The senior President, Special Director, President, Head-Corporate Planning, Senior Manager-International Division (in-charge of excise) of MPTEL have in their respective statements admitted the entire modus, i.e., procurement of duty free raw materials, usage of the same in the manufacture of goods that were cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use 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 2001-02 (upto March 2002) without payment of duty due thereon, under erstwhile Rule 9(2) of the Central Excise Rules, 1944 and under Rule 17(1) of Central Excise (No. 2) Rules, 2001 & Central Excise Rules, 2002 read with proviso to Section 11A(1) of the Central Excise Act, 1944. ii. Pay an amount of Rs. 89,58,603,76 that was collected from the customers towards Central Excise duty under the Commercial invoices raised by them for removal of conductors and not paid to Government exchequer, in terms of Section 11D of Central Excise Act, 1944. iii. penalty equivalent to the amount of duty mentioned at (i) above under Section 11AC of the Central Excise Act, 1944. iv. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 levied as stated in para 23 which reads as follows :- "23.0 In view of the foregoing, M/s. Marshal Power & Telecom (India) Limited, No. 84 Akashpattu village, Vannur Taluk, Villupuram Dist., PIN-605101 are hereby required to show cause to the 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 : i. the total amount of Rs. 2,76,46,994/- (Rupees Two Crore Seventy Six Lakhs Forty six Thousand Nine Hundred And Ninety Four only) (BCD - Rs. 1,39,83,088.07, SAD 31,572 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 manufacturing and clandestine removal of excisable goods without the permission of the competent authority, viz., the Development Commissioner of MEPZ of the Central Excise Department. As the result of the finding as above, the Commissioner confirmed the demand of the duty in terms of the show-cause notice. The Commissioner in paras 25 and 26 dealt with the manner in which the manufacture and clearance of the goods were done in a clandestine manner contravening the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, 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 lakhs) paid by MPTEL on various dates during the investigation and as detailed in Annexure E of the SCN towards the above duty demand and the balance amount is liable to be paid by MPTEL. (iii) I hold that MPTEL is liable to pay interest at appropriate rates on the amount of duty at (i) above under Sec. 11AB of the Act. (iv) I impose a penalty of Rs. 2,76,46,994/- (two crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Central Excise Act, 1944. After careful examination of the various aspects involved, the Bench observes that in this case, the final product manufactured was from indigenous raw material. Besides, the capital goods used in the manufacture were also indigenous. The only aspect that remains in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 applicant shall pay a simple interest @ 10 per cent p.a., on the settled duty amount from the date the duty was due till the date of payment of the same. Revenue shall calculate the interest payable accordingly and communicate to the applicant wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that there was no justification for levy of penalty by the Settlement Commission and prayed for setting aside the levy of penalty. 19. Sri K. Ramakrishna Reddy, learned Senior Central Government Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Excise having jurisdiction, can pass appropriate orders as it thinks fit on the matters covered by the application, sub-section (9) provides for levy of duty, penalty or interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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, be reopened in any proceeding under this Act or under any other law for the time being in fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 remitted to the revenue. The findings in the present case regarding excise vio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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