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CX - Findings that disclosures are honest and yet there is suppression and mis-declaration of facts cannot be reconciled - Remark made by Settlement Commission in final order deleted: High Court

By TIOL News Service

MUMBAI, SEPT 30, 2016: THE assessee was not amortizing the value of dies/fixtures supplied by M/s. Tata Motors Limited in the value of goods/sub-assemblies being manufactured and cleared on payment of duty.

But naturally, a SCN came to be issued demanding duty on the alleged under valuation.

The petitioner approached the Settlement Commission for settlement of his case and the Commission admitted the application and passed an order of Settlement.

The petitioner is aggrieved with this remark made in paragraph 7.4 of the order and which reads -

"7.4 … It is a clear case of suppression and misdeclaration of facts with intent to evade duty. …"

Before the High Court, the petitioner submits that having paid the Central Excise Duty, the interest component as well as the penalty, then, bearing in mind the bonafide conduct of the petitioner, this remark should be deleted.

The Counsel for the Revenue submitted that the remark was justified. Inasmuch as the petitioner was found to have not disclosed the value of dies/fixtures in the declared value of parts/components and which resulted in short payment of the Central Excise Duty;that it is in these circumstances the remark was inserted and it does not cause any prejudice and, therefore, it should not be deleted.

The High Court inter alia observed –

+ We do not think that in the given facts and circumstances, there was any need to record a finding that there is a suppression and mis-declaration of facts with intent to evade duty.

+ The Settlement Commission, in this case, took the application for settlement on record and adjudicated it in accordance with law. The very purpose was to provide an opportunity to parties like the petitioner to come clean by readily accepting the calculations and computation.

+ Precisely, that has been done and there is no challenge to the order of the Settlement Commission on merits. The findings that the disclosures are honest and yet there is suppression and mis-declaration of facts cannot be reconciled. We, therefore, delete that part of the order.

The writ petition was allowed to that extent.

Nonetheless, the High Court also made it clear that – "By virtue of this order, the petitioner will not derive any benefit in the form of refund of duty, interest and penalty already paid under the order of the Settlement Commission."

In passing : Rule 9 of CCR, 2004 refers. See - 2011-TIOL-1289-CESTAT-MUM & 2014-TIOL-1096-CESTAT-MUM.

(See 2016-TIOL-2313-HC-MUM-CX)


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