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TMI Blog2021 (4) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... them within 30 days from the date of receipt of this order and compliance of the same should be reported to the Bench; (ii) The Bench imposes a penalty of Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) on the applicant. Immunity from imposition of penalty in excess of this amount is granted to the applicant; (iii) The co-applicant is however granted immunity from imposition of penalty; (iv) The applicant shall pay a simple interest of 10% per annum on the settled amount from the date of clearance to the date of actual payment of duty. Immunity from imposition of interest over and above this rate is granted to the applicant. The Revenue, after the applicant pays the balance duty and reports compliance calculate the interest and communicate the same to the applicant within 15 days to the applicant. The applicant shall within 15 days of receipt of the communication pay the interest due and report compliance to the Bench. (v) Applicant and co-applicant are granted immunity from prosecution under the Central Excise Act, 1994". 15. The above immunities are granted in terms of Section 32K(1) of the Central Excise Act, 1944. The immunities granted above are liable to be withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured tobacco was an excisable item. According to him, the percentage prescribed for wastage in these instructions is 30% and what he claimed was less than that. However, the Bench considers that allowance of 10% driage in toto for all the processes listed out by the applicant would be reasonable and fair. Accordingly, the Bench fixes the driage at 10% in this case". 5. Mr.P.R.Renganath, learned counsel for the petitioner submits that even as per the investigation report filed before the 1st respondent by the office of the 2nd respondent, it was acknowledged that in the Tobacco Manual upto 30% can be condoned and a hierarchy was prescribed to condone the wastage when un-manufactured tobacco was an excisable item and excise duty was payable on it. 6. The learned counsel for the petitioner submits that the impugned order passed by the 1st respondent was not only contrary to the Tobacco Manual which was earlier in force but also contrary to the defence of the 2nd respondent Commissioner of Central Excise before the 1st respondent Settlement Commission. 7. It is submitted that even if the claim of the petitioner for 24% loss on account of drying of tobacco leaves (driage) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the High Court exercising the writ jurisdiction and the High Court should not have substituted its own opinion against the opinion of the Settlement Commission when the same was not challenged on merits". 12. She further submits that the Hon'ble Supreme Court in Tata Cellular vs Union Of India, (1994 (6) SCC 651) held that the judicial review under Article 226 of the Constitution of India is confined to decision-making process and not to the decision. She submits that there is no infirmity in the decision-making process adopted by the 1st respondent Settlement Commission and therefore the writ petition filed by the respondent was misconceived. 13. By way of re-joinder, the learned counsel for the petitioner submits that the observation in para-13 of the impugned order fixing the loss due to drying of leave at 10% was contrary to guidelines of the 1st respondent Settlement Commission and therefore calls for interference. 14. He therefore submitted that the impugned order was perverse to that extent inasmuch as the 2nd respondent Commissioner of Central Excise, had estimated the loss that can be accepted between 15 to 19%. 15. Finally, the learned counsel for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) natural or (b) accidental absorption of moisture or of any other foreign matter during transit or storage or by deliberate addition of foreign matter during processing ...... .... In this case of transports from curer's premises, the responsibility for losses must be fixed on the transporter who removed the goods from the curer's premises and who had signed the relative transport certificate or to whom the relative transport permit has been issued...... Since it is not practicable to draw up schedule of losses suitable for application throughout the country, Collectors should see that the table of losses drawn up by them takes into account the various local factors such as conditions of transit or storage, mode of transport and weather conditions. The powers of officers to condone and/or/adjudicate losses are given below: SI.No. Officer Percentage and monetary limits on power of condonation Limits upto which duty may be demanded Remarks 1. Inspector Upto 5% in case of whole leaf tobacco and 3% in all other cases provided the duty on the total deficiency does not exceed Rs. 100/- All cases which exceed limits laid down in column 3 should be referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emi processed tobacco (SPT, in short), their number can never determine the quantity sent. The applicants were only concerned about the quantity (in Kgs.) of tobacco receipts at Kumbakonam and not on the number of gunny bags of tobacco received. Thus, the revenue's stand in this regard is incorrect and is not logical. As regards the revenue's contention that certain documents maintained by the applicant contained the quantity of semi-processed tobacco sent as 7500 Kg., it is submitted that the applicant has accounted the wet weight of SPT in those records and at Kumbakonam, where the manufacturing takes place, the applicant preferred to account the quantity of SPT consumed in the manufacture of final products. It is once again reiterated that the applicant has not claimed any kind of loss of raw tobacco in their statutory records maintained for excise purposes, which confirms the applicant's stand on this issue. Further, the revenue has contained that the SPT has been transferred to Kumbakonam after certain processes carried out at P.Puliampatti and hence this quantity cannot be again claimed as wastage from the dispatched quantity of 7500 Kgs. In this regard, it is stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport, but have reiterated their earlier replies filed in response to applicant's submissions made before the Hon'ble Settlement Commission. It is thus appears that the revenue has no proper answers/justifications for the various inconsistencies pointed out by the applicants in their submissions and have been keeping on repeating their allegations made in the SCN. In view of the above, the applicants begs to submit that the applicant's contentions brought out in the report of Commissioner (Investigation) may kindly be considered on merits." 22. Formerly Rule 233-A of the Central Excise Rules, 1944, the Central Excise Act, 1944 provided a method for determining the annual stock. The said Rule was for annual stock taking for Tobacco at the end of the year. The said Rule read asunder:- Rule 223A:-Account of stock of goods in a factory or warehouse to be taken and balance to be struck. - As often as the Collector may deem it necessary or proper, and at least, once in every year, the stock of excisable goods remaining in a factory, warehouse or store room licensed or approved for the storage of such goods shall be weighed, measured, counted or otherwise ascertained in the presence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t arrived by the Settlement Commission is not to be tampered in a writ petition as these findings and conclusion are final as per the decision of the Hon'ble Supreme Court in Union of India and Others vs. Ind-Swift Laboratories Ltd., (2011) 4 SCC 635. 26. The proceedings before the Settlement Commission proceeds on the principal of trust. An applicant who was admittedly an evader of tax is expected to make a clean breast of his tax sins before the Settlement Commission and atone for mistakes and should undertake to pay the tax by making true and full disclosure before it. 27. As an incentive to encourage such deviant assessee's who opt to alter their deviant ways, a golden chance is given to them for settling the case under the Act. In return such assessee's may be given immunity from prosecution and penalty under the scheme of the Act. 28. Settling dispute before the Settlement Commission was devised as an mechanism to bring an end to the dispute based on the recommendation of the Wanchoo Committee as a compromise measure of a statutory settlement machinery where a big evader could make a disclosure, discharge what the Commission fixes as tax and thus buys quittance for him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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