METALEX PIPES LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Customs and Central Excise Settlement Commission has, by its order dated 31st May, 2005, dismissed the applications filed by the petitioners under Section 32-F of the Central Excise Act, 1944 (for short "the Act"). Aggrieved the petitioners have filed the present petition to assail the said order.

(2.) The petitioner company is engaged in the manufacture of MS Pipes and is registered with the Central Excise Department. In February, 2002, the Anti Evasion Wing of the Commissionerate searched the factory premises of the company and started an investigation, culminating in the issue of a show cause notice to the company, alleging that the company had manufactured, and removed without payment of the excise duty MS Pipes valued at Rs.4,01,68,590/- during the year 1999-2000, Rs.8,03,24,428/- during the year 2000-01 and Rs.6,17,99,704/- during the year 2001-02. The notice on the above basis alleged non-payment of central excise duty amounting to Rs.2,78,16,835/- for the years in question. The notice further alleged that the clearances had not been recorded in 'statutory records', and proposed to raise a demand for payment of the duty amount afore-mentioned with interest payable under Section 11AB of the Act. It also proposed to confiscate the pipes seized in the course of the investigation from the premises of M/s.Star Transport Co.and M/s. ITAC Ltd. and to impose penalties under the provisions of the Act, apart from adjusting the sum of Rs.4 lakhs deposited by the petitioner-company on 18th March, 2002 towards the duty amount.

(3.) On receipt of the show cause notice, petitioner No.1 company and five others filed applications under Section 32-F of the Act for settlement of the dispute before the Customs and Central Excise Settlement Commission, New Delhi. In the said application, petitioner No.l herein, admitted a duty liability of Rs.10,85,000/-. The application, inter alia, stated that the company was apart from manufacturing MS Pipes also engaged in the trading of the same. It was further stated that the show cause notice was based on data retrieved from the computer of the petitioner company, enquiries made from the buyers, information collected from the banks and the statement of Sh.Suresh Bhardwaj, the Director of petitioner No.l company. The application alleged that the computer entries constituting the basis of the proposed action were fudged by one of the disgruntled employees of the company. It was further canvassed that the sale figures attributed to the company included those made in the course of its trading activity which sales were not dutiable. Theft' of certain books of accounts and other records such as the invoice book for the period 1999-2001, purchase bills, stock registers, sales tax forms received from the buyers was also set up by the petitioner company. It was also alleged that a complaint had been lodged by the company with the police in regard to theft of books and bungling of entries of sales and purchases in the petitioner's accounts.