Customs, Excise and Gold Tribunal - Delhi
M/S. Reby Castings (Pvt.) Ltd. vs Cce Jaipur on 23 April, 2001
ORDER
P.S. BAJAJ
1. These four appeals have been filed by the appellants, M/s. Reby Castings (P) Ltd. against the common Order-in-Appeal dated 19th Jan., 2000 passed by the Commissioner of Central Excise (Appeals), Jaipur, vide which he had up-held the four orders of different dated, of the Joint Commissioner (Tech.), who confirmed the duty and penalties of various amounts as indicated in those orders, for the period September, 1997 to March, 1999, on the appellants.
2. The appellants were engaged in the manufacture of ingots/billets of non-alloy steel faling under Chapter 72 of the Central Excise Tariff Act, 1985. These goods were notified under Notification No.30/97-CE (NT) dated 30.8.97, as amended by Notification No.43/97-CE (NT) dated 30.08.97 by the Central Government, for which duty was required to be charged under Section 3 A of the Central Excise Act, 1944 read with Rule 96 ZO of the Central Excise Rules, 1944. The total capacity of the furnace of the appellants for the purpose of discharging duty was determined provisionally by the Commissioner of Central Excise vide Order dated 29.09.97 at 3.3 MTs and as a consequence thereof, they were required to deposit Rs.5,50,000/- per month as excise duty liability, under Rule 96 ZO (3). when they failed to discharge duty, according to that order, they were served with four show cause notices, dated 4.9.98 for the period September, 97 to March, 98, for payment of duty of Rs.14,92,097/-, dated 3.11.98 for the period April, 98 to September, 98, for payment of duty of Rs.7,45,445/-, dated 2.4.99 for the period October'98 to March'99, for payment of duty of Rs.15,65,000/- and dated 25.06.99 for the period September'97 to March'99 for payment of duty of Rs.10,86,173/-.
3. After getting their reply to all those show cause notices, wherein they denied their liability for payment of duty amounts mentioned therein mainly on the ground that their abatement claim for the period 1.9.97 to 31.3.99 was pending and that they had already opted out from the Scheme w.e.f. (SIC) and as such were liable to pay the duty only on the actual production. The Joint Commissioner (Tech.) however, did not agree with these contentions of the appellants and accordingly confirmed the duty demand as detailed in the show cause notices referred to above and also imposed penalties of various amounts as recorded in his orders-in-original. Feeling dis-satisfied with all those orders,m the appellants filed the appeals before the Commissioner (Appeals), who up-held all those orders through common Orders-in-Appeals dated 19.01.2000.
4. The appellants have filed the present appeals against the said impugned order dated 19.01.2000 passed by the Commissioner of Central Excise (Appeals), Jaipur.
5. Shri R.Santhanam, ld. Counsel has assailed the validity of the impugned order before us on the ground that the abatement claim of the appellants for the period 1.9.1997 to 31st March, 2000, had been decided by the Asstt. Commissioner vide Order dated 5.10.2000 in their favour and that vide Final Order dated 24/27.3.2001, the Annual Capacity of the furnace of the appellants had been also determined at 10560 M.T. and as such, the differential duty demand confirmed on the strength of the four show cause notices, referred to above, cannot be legally sustained. He has also contended that the penalties could not be imposed on the appellants as they had already paid duty on the basis of the provisional assessment of the Annual Capacity, made by the Commissioner vide Order dated 29.9.97. He has produced the copy of the order dated 24/27.3.2001 of the Commissioner and also copy of the Order dated 5.10.2000 of the Asstt. Commissioner, who decided the abatement claims of the appellants. Apart from this, learned Counsel has further contended that when the appellants had opted out of the Scheme form 26.5.98, they could be only charged duty on the basis of annual production. In this context, he has also referred to the Final Order of the Tribunal dated 28.2.2001 passed in bunch of 14 appeals (M/s. Meenakshi Castings & Ors. Vs. CCE) wherein the same point was raised and the matter was remanded to the Commissioner for looking into the same.
6. Shri Rajeev Tandon, ld. SDR on the other hand has reiterated with the correctness of the impugned order of the Commissioner (Appeals). He has however no objection if the matter is sent back to the adjudicating authority for fresh decision of the matter in the light of the abatement order of the Asstt. Commissioner and the final order of the Commissioner determining the annual capacity of the furnace of the appellants and of the Tribunal referred to above.
7. We have gone through the record and heard both the sides.
8. The impugned order has been admittely passed on the strength of provisional order of the Commissioner determining the annual capacity of the furnace of the appellants. The provisional capacity was determined initially vide order dated 29.09.1997 at 10560 M.T. (3.3 x 3200M.T), and that capacity was however thereafter raised and finalised at 11657.60 M.T. vide order dated 6.5.99. But, as is borne-out from the record, on the representation of the appellants, finally the Commissioner determined the annual capacity of production at 10560 M.T. He thus, set aside the order enhancing the annual capacity to 11657.60 M.T.
9. During the adjudication of all the show cause notices in question, on the strength of the impugned order had been passed, admittely, the abatement claims of the appellants on the account of closure of the factory were pending for the disputed years and those had been allowed after passing of the impugned order-in-appeal before us, vide order dated 5.10.2000 by the Asstt. Commissioner. The copy of that order has been placed on record by the counsel before us. The benefit of that order has to be accordingly allowed to the appellants towards the duty liability. Therefore, the impugned order confirming the duty on the basis of the enhanced annual capacity of the production fixed at 11657.60 M.T. vide final order dated 6.5.99, cannot be sustained and the matter requires re-consideration in view of the latest order passed by the Commissioner dated 24.3.2001 vide which he has determined the annual capacity at 10560 M.T. and of the Asstt. Commissioner allowing abatement claims of the appellants for the period 1.9.97 to 31.3.2000.
10. The plea of the appellants that after having opted out of the Scheme on 26th May, 1998, they were liable to pay the duty only on the actual production w.e.f. 1.6.98 at-least, also required re-examination in view of the final order of the Tribunal referred to above.
11. In the light of the changed facts and circumstances referred to above, in our view, the matter deserves to be sent back to the adjudicating authority for de novo decision. Therefore, the impugned order of the Commissioner (Appeals) is set aside and the case is sent back to the adjudicating authority for fresh decision in the light of the observations made above and in accordance with the law.
12. Both the sides will be at liberty to raise any question of facts and law before the adjudicating authority. The question as to whether the penalty under circumstances could be legally imposed on the appellants shall also be considered while passing the fresh order in accordance wit law as according to the Counsel under the giving circumstances, penalty could not be imposed.
13. The adjudicating authority will also examine the applicability of law laid-down in the case of Sathavahana Steels & Alloys (P) Ltd. Vs. Government of India - 1999 (114) ELT 787 (Andhra Pradesh) and any other relevant cases which may be cited before him by both the sides.
14. The appeals of the appellants accordingly stand allowed by way of remand.
Order dictated & pronounced in the Open Court on 23.4.2001.