- (1.) The petitioner No.1 is a proprietorship firm and petitioner No.2 is a private limited company and are engaged in the manufacture and sale of Pan Masala, commonly known as Gutka. On 8.6.2002 the Central Excise Department conducted a detailed search at the petitioner's premises and found certain quantity of the excisable goods in excess of the recorded stock. Cash amounting to Rs.58,50,750/- was also seized. After completion of the investigation, two show cause notices dated 5.12.2002 and 23.5.2003 were issued calling upon the petitioners to show cause as to why the central excise duty, penalty and interest may not be levied and the currency and the goods so seized may not be confiscated.
(2.) During the pendency of the show cause notices the petitioners preferred an application under Section 32E of the Central Excise Act (hereinafter referred to as the "Act") before the Settlement Commission praying for the settlement of the dispute. The application for settlement of the case was processed and the Commission passed an order holding that the conditions prescribed under the Act were fulfilled and, accordingly, admitted the application to be processed under Section 32 F of the Act. The Settlement Commission after taking into the facts and circumstances of the case passed an order dated 28.2.2008 holding that petitioner No.1 was liable to pay excise duty to the tune of Rs.92,22,581/- and petitioner No.2 was liable to pay duty amounting to Rs.18,52,978/- which was required to be paid within 15 days from the date of receipt of the order. On the question of interest, the Commission held that the case being one of clandestine removal, petitioner Nos.1 and 2 were liable to pay interest on the delayed payment of duty as per the prescribed rate under Section 11AB of the Act. The Department was directed to calculate interest which was to be paid by the petitioner within 15 days from the receipt of such communication from the Department. On the question of penalty, the Commission found that the case being one of the clandestine removal, the Commission declined to grant immunity to the petitioners from penalty leviable under the provisions invoked in the show cause notice. The Commission, however, directed that the total penalty imposed on the petitioners, which was equal to the penalty imposable under Section 11AC of the Act was liable to be paid. The Commission computed a sum of Rs.46,11,290/- as penalty on petitioner No.1 and Rs.9,26,399/- upon petitioner No.2. The Commission however granted immunity to the petitioner from prosecution under the Customs Act, 1962 subject to payment of duty, interest, fine and penalty.
(3.) Since the order of the Settlement Commission contained clerical errors, the petitioners moved an application dated 19.3.2008 for rectification of the mistake. The Settlement Commission found that its order contained certain calculation mistakes and, accordingly, issued a corrigendum dated 11.9.2008 revising the duty payable. As per the corrigendum dated 11.9.2008 the revised duty that become payable by petitioner No.1 was Rs.41,22,036/- and penalty was revised to Rs.20,61,018/-. The Commission directed the revised duty and penalty to be payable within 15 days and interest to be paid within 10 days from the date of communication of the order.;