2003 (6) TMI 414 - Commission - Central Excise

Applicant's Non-Cooperation Leads to Case Referral for Non-Payment of Duty

IN RE: LILY CHEMICALS LTD.

The Settlement Commission found that the applicant's persistent non-cooperation and failure to comply with orders to pay the admitted duty liability ... Settlement Commission - Payment of admitted duty liability Issues:Settlement of excise duty liability, non-cooperation with Settlement Commission, failure to comply with orders, request for extension due to financial hardships and illness, applicability of judgment in case of Maruti Udyog Ltd.Settlement of Excise Duty Liability:The case involved M/s. Lily Chemicals Ltd. filing a Settlement Application due to a shortage of cotton coated fabrics and damaged cotton fabrics found during a visit by Central Excise Officers. A show cause notice was issued proposing duty recovery, interest, and penalty. The applicant sought to settle the admitted duty liability of Rs. 3,65,906 in instalments, requesting waiver of interest and penalty. The case was admitted, and an order was issued for payment within 30 days. Despite multiple opportunities and extensions, the applicant failed to pay the admitted duty liability.Non-Cooperation with Settlement Commission:The Settlement Commission noted that the applicant did not cooperate despite multiple opportunities given. The applicant failed to comply with orders to pay the admitted duty liability within specified time frames. The Commission emphasized the need for cooperation from both the applicant and the Revenue for expeditious case resolution, highlighting the applicant's lack of cooperation leading to non-realization of revenue and hindering the proper officer's ability to recover pending dues.Failure to Comply with Orders:Despite repeated hearings and extensions, the applicant consistently failed to pay the admitted duty liability as directed by the Settlement Commission. The applicant's reasons for non-payment, including financial hardships and illness of the Managing Director, were considered, but the Commission found the lack of compliance unacceptable.Request for Extension due to Financial Hardships and Illness:The applicant cited financial hardships and the Managing Director's illness as reasons for not paying the balance admitted duty liability. While the applicant requested additional time to make the payment, the Revenue highlighted the applicant's failure to deposit the amount within the specified time frame.Applicability of Judgment in Case of Maruti Udyog Ltd.:The Revenue argued that the case involved clandestine removal, questioning the applicability of the judgment in the case of Maruti Udyog Ltd. cited by the applicant. The Settlement Commission, however, focused on the applicant's lack of cooperation and non-compliance with orders rather than delving into the specifics of the judgment's applicability.In conclusion, the Settlement Commission found that the applicant's non-cooperation warranted sending the case back to the Central Excise Authorities for appropriate action as per the provisions of the Central Excise Act, 1944. The Commission emphasized the need for cooperation to expedite case resolution and revenue realization, highlighting the consequences of failing to comply with orders issued by the Commission.