Case Law Details
M/s Parasrampuria International Vs CCE Indore (CESTAT Delhi)
Appellant, M/s. Parasrampuria International, A Division of Parasrampuria Synthetic Ltd., Sector-III, Pithampur, (hereinafter referred to as the Appellant Company) are a 100% EOU engaged in the manufacture of Polyester Cotton yarn and Polyester blended yarn falling under sub-heading no.5505.10, 5515.20, 5202.10, 5202.99, 5509.21 and 5509.22 of the Central Excise Tariff for export. Shri S.K. Chabra is the Managing Director of the appellant company and Shri S.V. Sharma is the Asstt. General Manager of the appellant company during the period of dispute. The period of dispute in this case is from October, 2001 to March, 2006. The appellant during this period, in addition to clearing the finished products, ‘spun yarn’ for export, were also making DTA clearances of cotton waste. The Director General of Central Excise Intelligence initiated investigation in respect of the value of DTA clearances and gathered evidences which indicated that the value and quantity of the DTA clearances had been under-declared and on this basis, a show cause notice was issued to the appellant company. In respect of that show cause notice, the appellant filed an application before the Settlement Commission for the settlement, wherein they admitted short payment of duty including education cess of Rs.1,28,22,150/-. The value of the goods cleared into DTA was about Rs.9 crores. The application filed by the appellant company before the Settlement Commission was decided by the Settlement Commission vide final order dated 26.2.08 by which the dispute was settled at Rs.1,28,22,150/- along with simple interest @10% p.a.
2 Subsequent to the Settlement Commissioners order, the eligibility of the appellant for concessional rate of duty in respect of the DTA clearances under notification no.8/97-CE dated 1.3.97, no.6/97-CE dated 1.3.97 and no.23/03-CE dated 31.3.32003 was reviewed by the jurisdictional Central Excise Authorities. The benefit of these exemption notifications was admissible only in respect of those clearances into DTA which had been made in accordance with the Exim Policy and in terms of the Exim Policy, the overall ceiling of the DTA clearances was 50% of the FOB value of the exports. Accordingly, it was found that during the period of dispute, the DTA clearances, of the appellant company had exceeded the ceiling of the 50% of the FOB value of the exports and as such, the clearances in excess of the ceiling were not eligible for concessional rate of duty and would attract duty at the normal rate in terms of the proviso to Section 3 (1) of the Central Excise Act, 1944. It is on this basis that show cause notice dated 1.12.2006 was issued to the appellant company, its Director, Shri S.K. Chabra and its Asstt. General Manager, Shri S.V. Sharma for –
(a) recovery of the central excise duty including education cess amounting to Rs.437.73 lakhs along with interest thereon under Section 11 AB;
(b) imposition of penalty on the appellant company under Section 11 AC of the Central Excise Act, 1944 and
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