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2015 (5) TMI 592 - MADRAS HIGH COURT

2015 (5) TMI 592 - MADRAS HIGH COURT - 2015 (324) E.L.T. 342 (Mad.) - Duty demand - MIsdeclaration of goods - Wrong claim of exemption - Held that:- duty admitted by the petitioner before the CCESC was ₹ 37,38,184/- which was settled at ₹ 36,90,325/-. The CCESC has accepted that the petitioner had extended co-operation in the proceedings before them. However, section 32K(1) of the Act requires both co-operation and full and true disclosure of the duty liability. It cannot be possibly .....

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o avail exemption and but for detection by the department during investigation by the department, the evasion would have gone unnoticed, is also a relevant factor to be taken into account - Decided against assessee. - W.P.No.17401 of 2008 And M.P.No.1 of 2013 - Dated:- 30-4-2015 - MR. S.VAIDYANATHAN, J. For Petitioner : Mr. S. Jai Kumar For the Respondent : Mr. A. P. Srinivas ORDER This writ petition has been filed, praying for the issuance of the Writ of Certiorarified Mandamus, to call for the .....

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ant period Nylon Monofilament Yarn of cross sectional dimension upto 1 mm and above 1mm was subjected to duty of excise. A show cause notice was issued, alleging that the petitioner has cleared such Yarn in the guise of Yarn of Cross Sectional dimension less than 1 mm, without payment of duty of excise and thereby demanded duty of excise to the tune of ₹ 40,55,655/- apart from interest and penalty. The petitioner has filed a petition for settlement of dispute before the respondent by admit .....

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by cash and the balance amount of ₹ 99,833/- was also paid by the petitioner through cenvat credit. The 1st respondent has directed the petitioner to pay simple interest at 10% on the settled duty liability and also imposed a penalty of ₹ 3,50,000/- and granted immunity from prosecution. In pursuance thereof, the jurisdictional Central Excise Authorities have directed the petitioner to pay a sum of ₹ 8,41,472/- towards interest. Thereafter, the petitioner has filed a Miscellan .....

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with the present writ petition. 3. A counter affidavit has been filed on behalf of the 2nd respondent, wherein it is stated that without complying the Admission-cum-Final Order dated 20.12.2007, the petitioner filed Miscellaneous Petition before the 1st respondent for modification of the order. The petitioner has paid a sum of ₹ 23,05,625/- towards duty settled by the Commission, leaving a balance of ₹ 99,833/-. In terms of the order passed by the Commission, the Respondent Departme .....

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ectional dimension of above 1 mm in the guise of less than 1 mm for the purpose of availing the exemption notification. The claim of the petitioner that sufficient amount of Cenvat credit would have been available to them to discharge their duty liability relating to their clandestine removal of Nylon Monofilament yarn of cross sectional dimension of above 1 mm, had they availed the cenvat credit during the relevant point of time is not a plausible ground for them for claiming exemption from pay .....

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-2003, 2003-04, 2004-05 and 2005-06 (four financial years), but the duty payable thereon for the said period was paid on different dates commencing from 12.8.2006, that too after the case was detected by the department. Therefore, the government was certainly deprived of the revenue due from the relevant period till the amount was actually paid much less through cash or through availment of cenvant credit as such, the petitioner is liable to pay the interest. The petitioner filed the miscellaneo .....

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the miscellaneous petition, seeking modification of the final order to the effect that the petitioner is only liable to pay interest on the duty liability discharged through cash, due to shortage of Cenvat credit since the duty paid through cenvat credit can be considered as payment of duty at the relevant point of time. However, according to the learned counsel, the department had worked out the interest liability for the entire amount of duty admitted and paid, irrespective of the fact that if .....

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petition, which is liable to be set aside. He would further contend that the interest has been charged by way of compensation to the government as it has been deprived of its revenue in the form of duty of excise, but the fact remains that only to the extent of duty liability payable by the petitioner, over and above the cenvat credit entitlement, the duty adjusted through cenvat credit is not at all a revenue to the government, but only an adjustment. With these contentions, the learned counse .....

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and the petitioner shall pay interest at 10% p.a. on the duty settled from the date when the duty became due till the date of actual payment and the contention of the petitioner that availing of the cenvat credit during the relevant point of time is not a plausible ground for the petitioner for claiming exemption from paying the interest. He pointed out that out of the total duty demand of ₹ 36,90,325/-, the petitioner paid ₹ 13,84,700/- on cash and balance amount of ₹ 23,05,62 .....

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CCESC has to settle cases only in accordance with law and the provisions of the Act and it has no power to go beyond those provisions. The power to grant immunity from penalty is conferred upon the CCESC by sub-section (1) of Section 32K of the Act. If it is satisfied that any person who made the settlement application "has co-operated with the settlement commission in the proceedings before it and has made full and true disclosure of his duty liability", it may grant to such person, s .....

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giving false evidence. 8. In view of the settled legal position, this Court is inclined to venture upon examining the decision making process followed by the CCESC in the present case. As regards the imposition of interest and penalty of ₹ 8,41,472/- and ₹ 3,50,000/- on the petitioner, I am unable to find fault with the decision-making process adopted by the CCESC. In fact, a perusal of the record, it reveals that during investigation, it was found that the petitioner had indulged i .....

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ch today and submitted that but for the detection by the department, the evasion would have gone unnoticed and hence, immunity from interest should not be granted and deterrent penalty should be imposed. 10. The Bench has considered the submissions made and the arguments put forth by both sides. The point raised by Revenue regarding payment of admitted duty liability from RG 23A Part II are technical in nature and can be ignored at this stage when the matter is getting settled in a spirit of set .....

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ch observes that the application fulfils the conditions stipulated for admission and also that the Advocate accepted the revised demand of ₹ 36,90-,325/- and have undertaken to pay the balance amount of ₹ 99,833/-. In view of the foregoing and the co-operation extended by the applicant, the Bench takes the view that this case merits admission and final settlement. However, with regard to immunity from interest, the Bench observed that the applicant enjoyed substantial financial accom .....

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