MECPRO HEAVY ENGINEERING LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner questions the legality of the action taken by respondents No.2 and 3 ( Commissioner of Central Excise and Superintendent, MOR-XII, MOD-11) requiring payment of duty payable under the Central Excise & Salt Act, 1944 (in short Excise Act) and the Central Excise Rules, 1944 (in short, the Rules). Petitioner's stand is that acting on the assurance held out by the respondents 2 and 3, it had made a declaration in terms of Kar Vivad Samadhan Scheme, 1998 ( in short, the Scheme)(Chapter-IV OF Finance (No.2) Act, 1998 (in short, the Finance Act).

(2.) After such declaration there was no scope for any demand as has been done. According .to respondents, the scheme has no application to petitioners' case and therefore the demand is in order. Background facts necessary for adjudication of the controversy are essentially as follows:- A show-cause notice dated 18/3/1996 was issued by the Commissioner Central Excise & Customs, Jaipur (in short, the Commissioner) alleging evasion of duty. Allegation essentially was to the effect that a concern, namely, M/S Ganga Nagar Refinery Pvt Ltd colluded with the petitioner in the manufacture and clearance of goods without paying central excise duty and such action was in contravention of the Rules, more particularly. Rule 9(1), 49, 52A, 53, 173B, 173C and 173F, 173G, 174 and 226 read with Section 6 of the Act. The Commissioner was also of the view that the petitioner was liable to penalty under Rule 209 of the Rules. The petitioner submitted its show-cause reply. By order dated 5/9/1998, the Commissioner held that petitioner was to pay Rs.1,24,200.00 under Section 11A(2) of the Act read with Rule 9(2) of the Rules. Penalty of Rs.1,24,200.00 was levied under Rule 173Q of the Rules along with interest at the rate of 20% of the central excise duty. There was no challenge to the order of adjudication.. The Scheme came into force with effect from 1/09/1998. A declaration was filed by petitioner seeking benefit of the Scheme. In the declaration filed under Section 89 of the Finance Act in Form No. 1B, a statement under verification, inter alia, was made to the following effect by the petitioner :-

(3.) Petitioner's stand is that after acceptance of the declaration/ the respondents were precluded from taking any action for nullifying the effect of the certificate of intimation under Section 90(1) of the Finance Act read with the Scheme. It is not in dispute that after making the declaration, the petitioner had in fact deposited requisite amount of duty. Respondents were of the view that the petitioner had made a false declaration that it did not have any disqualification in terms of Section 95 of the Finance Act. It is their stand that the conditions requisite for bringing in application of Scheme were not present. Such action is the subject matter of challenge, as indicated above.