TMI Blog2015 (3) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. Immunity from prosecution without approaching the Settlement Commission is governed by the provisions of Central Excise (Compounding of Offences) Rules, 2005. As per these rules, a person is liable to pay upto 50% of the duty evaded as compounding fees to seek immunity from prosecution. The Central Excise Duty in this case is settled at ₹ 1,73,25,387/- - The applicant is liable to pay interest as per the provisions of Sections 11AB and 11AA of the Central Excise Act, 1944 - the Bench imposes penalty of ₹ 50,00,000/- (Rupees fifty lakhs only) on the applicant M/s. Maithon Steel & Power Ltd. (Unit-I) and ₹ 20,00,000/- (Rupees twenty lakhs only) each on the co-applicants, Shri Sitaram Bagaria and Shri Amit Agarwalla and grants immunity from penalty in excess of these amounts - appeal disposed off. - Settlement Application Nos. 1026-1028/2014 in File No. C-486/CE/2014-SC(KB) - Final Order No. F-451/CE/2015-SC(KB) - Dated:- 24-3-2015 - Shri Karan K. Sharma, Vice-Chairman and C. Dube, Member Shri Harsh Shukla, Chartered Accountant and Ms. Satabdi Chatterjee, Advocate, for the Assessee. Shri Dipak Kr. Bandyopadhyay, Asstt. Commissioner, Prab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 1,73,25,387 (including E. Cess ₹ 3,36,415 and S HE Cess ₹ 1,68,208) should not be demanded and recovered in terms of proviso to Section 11A(1) read with present Section 11A(4) of the Act, (ii) Interest at appropriate rate under Section 11AB read with present Section 11AA of the Act should not be recovered, (iii) Penalty should not be imposed under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002 ( the Rules in short), (iv) the amount of ₹ 70,00,000 paid by the applicant during investigation should not be appropriated towards the above demand. 3.2 The co-applicants were also called upon to show cause as to why penalty should not be imposed upon them under Rule 26 of the Rules. 4.1 In the application for settlement read with their reply dated 21-7-2014 to the statutory notice under Section 32F(1) dated 8-7-2014, the applicant admitted the allegation of short payment of C.E. duty to the extent of ₹ 1,62,70,862 towards duty against ₹ 1,73,25,387 demanded in the demand in SCN and ₹ 46,10,764 towards interest on the entire quantity of excisable goods alleged to have been removed without payment of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -vis the amount demanded in the SCN and prayed for not granting immunity from penalty and prosecution. 6.2 Jurisdictional Commissioner of Central Excise, Bulpur, in his report dated 11-9-2014 expressed similar views. 6.3 The applicants vide letter dated 16-9-2014 requested for a copy of the report of the jurisdictional Commissioner and the DGCEI. Copies of the same were provided to them. 6.4 The case was listed for hearing on 29-10-2014 and 6-1-2015. However, the hearings on these dates were adjourned at the applicants requests. 7.1 The case was finally heard on 3-3-2015. During the hearing, Shri Harsh Shukla, Chartered Accountant, and Ms. Satabdi Chatterjee, Advocate, appearing on behalf of the applicants admitted the duty liability of ₹ 1,73,25,387/- as demanded in the SCN, and submitted that since they have made a full and true disclosure, immunity from fine, penalty and prosecution may please be granted to the main applicant and co-applicants. Regarding their plea about the payment of interest for the period when Cenvat credit was available with them, they relied upon judgments in the case of Apollo Tyres Ltd. v. Deputy Commissioner of Central Excise, Thriss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Rule, 2002, no excisable goods shall be removed without payment of duty from any place where they are produced or manufactured. Sub-section (1) of Section 11AA of the Central Excise Act, 1944 clearly specifies that Notwithstanding anything contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provision of this Act or the rules made thereunder, the person, who is liable to pay duty, shall, in addition to the duty, be liable to pay interest at the rate specified in sub-section (2), whether such payment is made voluntarily or after determination of the amount of duty under Section 11A . Sub-section (2) of Section 11AA of the Central Excise Act, 1944, also specifies that Interest, at such rate not below ten per cent and not exceeding thirty-six per cent per annum, as the Central Government may, by notification in the Official Gazette, fix, shall be paid in terms of Section 11A after the due date by the person liable to pay duty and such interest shall be calculated from the date on which such duty becomes due up to the date of actual payment of the amount due. Sub-section (1) of erstwhile Section 11AB also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt has also been admitted during hearing on 3-3-2015. The bench observes that the applicant has been clearing the goods without issue of invoices, without mentioning these goods in the Daily Stock Account, had not reflected these goods in the returns filed and had also not paid duty on the captioned goods in contravention of Rules 4, 6, 8, 10, 11 and 12 of the Central Excise Rules. Thus the facts and issues of this case are totally different from the case of Apollo Tyres, which does not help the applicants in any manner. The Bench also finds that the applicant has admitted non-payment of duty by clandestinely removing the goods from their factory since 1-4-2010 and this non-payment of duty on removal of excisable goods continued from 1-4-2010 till it was detected by DGCEI. The second judgment in the case of M/s. Dodsal Engineering cited by Shri Harsh Shukla, Chartered Accountant, is also not on this issue. Contrary to the submissions of the applicant, Bench finds that Hon ble Bombay High Court, in the case of Padmashri V.V. Patil SSK Ltd. - 2007 (215) E.L.T. 23 (Bom.) has held that the interest chargeable u/s 11AB is a sort of civil liability of the assessee who has failed to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Central Excise, Bolpur, against the settled sum of ₹ 2,50,00,000/- on account of penalty as an interim measure. The Hon ble Calcutta High Court had also restrained the respondents from taking any steps or coercive measures for recovery of penalty and interest from the petitioners for a period of 4 weeks from the date. The validity of this order was till six weeks after reopening of the Court following Puja vacation or until further order/orders whichever is earlier, in case the aforesaid sum is paid within the specified period. No further orders have been brought to the notice of the Bench. 11.1 The Bench finds that at Para-59(XVI) of the Grounds of Appeal, the petitioners in W.P. 27653(W) of 2014 have contended that had the petitioners followed adjudication route and then they would have had option of paying only 25% of duty as penalty under Section 11AC of the Central Excise Act, 1944. Thus by following settlement route, petitioners cannot be put to worser situation keeping in view the intent and purpose behind settlement commission. 12. The Bench observes that the petitioners in that case relating to M/s. Maithan Steel Power Ltd. (Unit-II), register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of a package and takes into consideration all the aspects of the case in a holistic manner before determining the issues of penalty and interest as well as the extent of immunity therefrom. It is in this context that sub-section 5 of Section 32F confers on the Settlement Commission the power to pass such order as it thinks fit on the matters covered by the application .. . It is therefore, observed that, the scheme of settlement, as contained in Chapter V of the Excise Act is distinct, from the adjudication undertaken by a Central Excise Officer under the other Chapters of the Excise Act. Therefore, once the Petitioner has adopted the court of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit, under the proviso to Section 11AC of the said act which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement undertaken under the provisions of Chapter-V of the Act. In view of the foregoing observations, we are of the opinion that there is no infirmity in the impugned order dated 29th April, 2009, so as to warrant interference by the under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench observes that the co-applicants, Shri Sitaram Bagaria and Shri Amit Agarwalla, were directly involved in the day-to-day affairs and management of the company, procurement of unaccounted raw materials, clandestine manufacture of finished goods and their removal from the factory without payment of Central Excise Duty with the intent to evade payment of Central Excise Duties. 18. Taking the above into account and in the facts and circumstances of the case, the Bench settles the case under Section 32F(5) of the Act on the following terms and conditions :- ORDER Central Excise Duty : The Central Excise Duty in this case is settled at ₹ 1,73,25,387/-. The jurisdictional Commissioner should appropriate the sum of ₹ 1,62,70,862/- already deposited by the applicant towards their duty liability and the balance amount should be paid by the applicant within 30 days. Interest : The applicant is liable to pay interest as per the provisions of Sections 11AB and 11AA of the Central Excise Act, 1944. The jurisdictional Commissioner should accordingly calculate the interest on the total accepted duty liability of ₹ 1,73,25,387/- and intimate the same to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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