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TMI Blog2013 (1) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... r proceeded on the basis of the admission of the petitioner and applied the same test while imposing penalty. It is most relevant to note that in the spirit of settlement the Settlement Commission has imposed a penalty of only Rs.15 lacs and not equivalent penalty as proposed in the show cause notice issue for adjudication. There is an admission on the part of the petitioner with regard to conduct which alleges deliberate mis-declaration under valuation. Thus in the present facts mens rea was an admitted position and therefore not an issue before the Settlement Commission. Therefore, the Apex Court order in Sir Shadi Lal Sugar and General Mills Ltd. [1987 (11) TMI 1 - SUPREME COURT] as relied by assessee would have no application - in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, show cause notice dated 30/11/2005 demanding in the aggregate a duty of Rs.3.30 crores was issued to the petitioner. The notice alleged that during the period April, 2001 to September,2002 the petitioner had cleared partially oriented yarn (POY) of higher grade by downgrading the variety of POY in its invoices and thus discharging duty on a lower value. Further during the period from 2000-01 to 2002-03 the petitioner had allowed special discount to certain select customers so as to reduce the value of its goods. This resulted in paying duty on lower value. However, these special discounts were received back by the petitioner from the select customers. Therefore evasion of duty is alleged. Therefore the petitioner was called upon to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above have not been substantiated and that the liabilities have been admitted to avoid prolonged litigation and in the spirit of settlement. In respect of the flow back of the special discount amount, it has been submitted that the payments were against outstanding dues by the respective customers. Further no flow back has been alleged in respect of lower invoicing of good quality POY as non standard material. Leniency in the terms of settlement have been sought on these plea. The Bench, however, does not find it necessary to go into details of these claims as the applicant has already admitted the duty liability, but for the claim of quantity discount and cum duty price benefit as discussed above. The bench also does not consider it app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Settlement Commission and submits that impugned order calls for no interference. This is particularly so as the petitioner has itself opted to forgo the normal process of adjudication and seek settlement. Further, the impugned order has exercised discretion and imposed a penalty of Rs.15 lacs and not an equivalent penalty as proposed in the show cause notice. 7) We have considered the submissions. It is an undisputed position that the petitioner had opted to go before the Settlement Commission to settle the dispute when show cause notices dated 30/11/2005 issued to it were pending adjudication before the Commissioner of Central Excise, Nagpur. The Settlement Commission has been constituted as an extra ordinary measure to en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts had not discharged duty as proposed in the show cause notice at the time of removal of goods. Further, in the application for settlement and seeking immunity from penalty, interest and prosecution the petitioner has submitted in Paragraph 38 of its application as under: The applicant submit that the present application is being filed before this Hon'ble Settlement Commission admitting and accepting the allegations contained in the show cause notice . It is very pertinent to note that the show cause notice dated 30/11/2005 has alleged deliberate mis-declaration i.e. valuation fraud and the manner in which it was done. Thus the acceptance of undervaluation and the allegation of a deliberate and fraudulent undervaluation is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the petitioner with regard to conduct which alleges deliberate mis-declaration under valuation. Thus in the present facts mens rea was an admitted position and therefore not an issue before the Settlement Commission. Therefore, the Apex Court order in Sir Shadi Lal Sugar and General Mills Ltd. (supra) would have no application. Further we find that the impugned order does indicate/disclose the reasons for imposing a penalty. In para 15 of the impugned Order the Settlement Commission decided not to consider/examine the pleas of the petitioner on merits of duty demand as the same was admitted by the petitioner and for that very reason also does not disregard the valuation fraud for the purposes of imposing penalty. In the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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