2011 (8) TMI 665

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..../s.Maruthi Tex Print & Processors Pvt. Limited, Hyderabad, is a concern registered with the Excise Department vide registration dated 05.08.1992 for manufacture of man-made fabrics (MMF) and also for manufacture of cotton fabrics under Tariff Heading 5406 of the Schedule to the Central Excise Tariff Act, 1985. During the course of business, search was carried out at various places, including the factory, registered office premises, their goodown and dealers' premises, which resulted in recovery of certain records relating to delivery of processed fabrics, and seizure of certain quantities of grey and processed fabrics. Resultantly, a show cause notice was issued to the petitioner's company demanding a duty of Rs.73,65,851/- on 24,24,846 LMT....

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....d.   v. A penalty of Rs.10,00,000/- was imposed for contravention of Rule 9(2), 52A(8), 173Q and 226 of Central Excise Rules, 1944."   3. Aggrieved by the said order, the petitioner filed an appeal before the CEGAT, Chennai. However, they withdrew the said appeal and thereafter, they have approached the Settlement Commission, Chennai, by moving an application under Section 32E of the Central Excise Act, 1944, making an initial true and full disclosure of Rs.8,76,864/-, which is mandatory requirement to go before the Settlement Commission. Finally, the Settlement Commission, by order dated 08.03.2002, passed the following order;-   "i. An amount of Rs.68,39,393/- was confirmed.   ii. A penalty of Rs.15 lakhs w....

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....ntify the fabrics cleared, the same has to be taken into consideration to determine the nature of the fabrics and its value also. 5. It was further contended that the petitioners, aggrieved by the order dated 05.05.1999, passed by the Commissioner of Customs and Central Excise, Hyderabad, after filing an appeal before the CEGAT, Chennai, thinking that they can settle their matter before the Settlement Commission under Section 32E, withdrew the pending appeal before the CEGAT, Chennai, only for the purpose of getting immunity from prosecution and for that, when they completely disclosed the full details, thereby, fully complied with the mandatory requirement to go before the Settlement Commission, the Settlement Commission, after confirmi....

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.... disclosure of Rs.8,76,864/-, which is mandatory requirement to go before the Settlement Commission. However, the Settlement Commission, by order dated 08.03.2002, while confirming the entire order passed in Order in Original dated 05.05.1999, declined to grant immunity for prosecution.   8. It is an admitted fact that the petitioner, while approaching the first respondent, has made a true and full disclosure of his duty liability, which was not disclosed before the Central Excise Officer, having jurisdiction. The first respondent declined to grant the immunity for prosecution, wherein out of four members, minority view shows that there is no clear evidence to hold that all the fabrics mentioned in the delivery challans were manmade....