Custom, Excise & Service Tax Tribunal
Cce Raipur vs M/S. Shree Ispat on 10 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. I Appeal No. E/2813/2009-EX(SM) [Arising out of Order-in-Original No. 44/Sec-3A/Commr/2009 dated 29.06.2009 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Raipur]. For approval and signature: Hon'ble Shri R.K. Singh, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? CCE Raipur .Appellants Vs. M/s. Shree Ispat .Respondent
Appearance:
Shri G.R. Singh, DR for the Appellant None present for the Respondent CORAM:
Hon'ble Shri R.K. Singh, Member (Technical) Date of Hearing: 27.01.2016 Date of Pronouncement: 10.03.2016 FINAL ORDER NO. 50990/2016-EX(SM) Per R.K. Singh:
The appeal filed by the Revenue against the order in original dated 29.06.2009 in terms of which the Commissioner passed the following order:
(i) I finalise and determine the annual capacity at 3670 MT for 1997-98 and fix the duty liability at Rs.91750 PM 9/97 to 3/98 under Rule 96ZP(3) of the Central Excise Rules, 1944.
(ii) I finalise and determine the ACP at 3670 MT and fix the duty liability at Rs.45,875/- for 98-99 under Rule 96ZP (3) of the Central Excise Rules, 1944.
(iii) I determine the annual capacity at 3670 MT for 1999-2000 and fix the duty liability at Rs. 1468000 for 1999-2000 under Rule 96ZP(1) of the Central Excise Rules 1944.
(iv) The assessee were accordingly required to pay the duty determined for the year 1997-98 and 1998-99 per month by tenth day of each month during the period from September 1997 to March 1999. In case of non-payment or short payment of duty, the same is ordered to be recovered alongwith interest at the rate of 18% per annum. In case, any duty is payable on account of finalization over and above the one fixed in provisional orders, and if the same is not paid by the tenth day of the month succeeding the month in which the capacity is finally determined, then interest at the rate of 18% per annum is ordered to be recovered in terms of Rule 96ZP of the Central Excise Rules 1944.
(v) The assessee were accordingly required to pay the duty determined for the year 1999-2000 by 31st of March 2000. In case of non-payment or short payment of duty, the same is ordered to be recovered alongwith interest at the rate of 18% per annum.
(vi) The assessee may claim abatement of duty for the year 1999-2000 on account of closure of the mill, if any, in accordance with law.
2. The facts of the case briefly stated are as under:
i) The respondent was engaged in the manufacture of Hot Rolled Products of Non-Alloy Steel falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985.
ii) The goods manufactured by the Respondent, were notified for the purpose of levy, assessment and discharge of duty of excise under Compounded levy scheme under section 3A of the Central Excise Act, 1944 (hereinafter referred to as the said Act) read with rule 96ZP of the erstwhile Central Excise Rules, 1944 (hereinafter referred to as the said Rules), on the basis of Annual Capacity of Production of the Mill as determined in accordance with hot Re-rolling Mills Annual Capacity Determination Rules, 1997 (hereinafter referred to as the Capacity Determination Rules). This scheme was effective from 01.09.1997.
iii) The Respondent, vide their letter dated 10.09.1997, exercised its option to work under Rule 96ZP(3) of the said rules and declared value of various parameters and other information of its mill, as required under the scheme.
iv) The jurisdictional Commissioner of Central Excise issued Provisional capacity Determination order dated 29.09.1997/01.10.1997 and provisionally determined the annual capacity at 3811.53 MT fixing the duty liability at Rs.95,288/- PM from September 1997 under Rule 96ZP(3) by applying the formula prescribed under the Capacity Determination Rules.
v) The respondent vide its letter dated 22.12.1997 intimated about their intention to change in the Annual Capacity of Production.
vi) The jurisdictional Commissioner, vide order dated 27.0.1998, permitted the Respondent to make the change.
vii) The Respondent, vide its letter dated 31.03.1998, intimated about completion of modification of the mill.
viii) The respondent vide their letter dated 01.06.1998, intimated about the closure of the mill from 30.05.1998.
ix) The jurisdictional commissioner issued another order dated 03/07.12.1998 provisionally determining the annual capacity at 3670 MT and fixing the duty liability at Rs.14,68,000/- for 1998-99 under Rule 96ZP (1) by applying the formula prescribed under the said Capacity Determination Rules.
x) Thereafter, the Commissioner of Central Excise, Raipur, vide impugned order, i.e. Order-in-Original No. 44/Sec 3A/COMMR/2009 dated 29.06.2009 finalised and determined the Annual Capacity of Production at 3670 MT for 1997-98 and fixed the duty liability at Rs.91750/- from September 1997 to March 1998 and determined the Annual Capacity of Production at 3670 MT for 1998-99 and fixed the duty liability at Rs.45875 for the period 1998-99, under Rule 96ZP(3) of the said Rules.
xi) However, he determined the Annual Capacity of production at 3670 MT for 1999-2000 and fixed the duty liability at Rs.14,68,000/- for said period under Rule 96ZP(1) of the said Rules with option to claim abatement of duty for the said period on account of closure of the Mill, if any, in accordance with law.
The revenue has contended that:
i) While the duty liability for the year 1997-98 and 1998-99 has been fixed under Rule 96ZP (3) the duty liability for 1999-2000 has been fixed under Rule 96ZP(1) by treating the letter of closure dated 01.06.1998 as the letter for opting out of Rule 96ZP(3).
ii) Honble Supreme Court in the case of CCE Vs. Venus Castings (P) Ltd. 2000 (117) ELT 273 (SC) and in the case of UOI Vs. Supreme Steels and General Mills 2001 (133) ELT 513 (SC) has held that manufacturer cannot opt twice during the same financial year and when he opts out of the scheme under the Rule 96ZP(3) it will be from the beginning of the next financial year. The respondent never opted out of the scheme under Rule 96ZP(3).
iii) Although the duty liability for the period 1999-2000 under Rule 96ZP(3) would come to Rs.5,50,500/- which is less than Rs. 14,68,000/- determined by the Commissioner, the actual realization would be less than Rs.5,50,500/- in view of the fact that the Rule 96ZP(1) allowed abatement while Rule 96ZP(3) does not allow abatement.
3. Revenue thus prayed to set aside the impugned order to the extent it extended the facility of Rule 96ZP(1) for the year 1999-2000.
4. No one was present on behalf of the respondent. Even on earlier dates like 10.12.2015, 28.10.2015, 04.08.2015 and 15.06.2015, nobody represented the respondent. Accordingly I proceed to decide the case on merits.
5. The brief issue involved in the case is whether the Commissioner was right in determining duty liability for the period 1999-2000 under Rule 97ZP(1) with liability for period 1997-98 and 1998-99 was determined under Rule 96ZP(3). I find that the respondent had opted for the scheme under Rule 96ZP(3) and therefore, it had to formally opt out of that scheme to be eligible for the provisions of Rule 96ZP(1). I find that the appellant had given the notice about closure to the factory but in that notice dated 01.06.1998 intimating about closure of the mill from 30.05.1998 there was no mention about opting out of the provision of Rule 96ZP(3). Honble Supreme Court in the case of Venus Castings (P) Ltd. (Supra) and Supreme Steels and General Mills (Supra) has in effect held that the manufacturer cannot opt twice during one financial year and the opting out of Rule 96ZP(3) would be applicable from the beginning of the next financial year. I find Revenues contention that the Commissioner was not right in extending the provisions of Rule 96ZP(1) for the period 1999-2000 when there was no such request from the respondent to opt out of scheme under Rule 96ZP(3) sustainable. Notice of closure cannot be read to be an option to opt out of Rule 96ZP(3). Incidentally in the wake of the Finance (No.2) Act, 2009 (by virtue of section 111 thereof) (The Honble High Court of Uttarakhand in the case of Kukreti Steels Ltd. Vs. CCE Meerut-1 2015 (322) ELT 465 (Uttarakhand) held that there is no dispute that Rule 96ZO was introduced / enacted vide notification NO. G.S.R. 448(E), dated 1st August 1997. Perusal of sub-section (3) of Section 111 of Finance (No.2) Act, 2009 would reveal that any action taken or anything done on purported to have been taken or done at any time during the period of commencement on or from 1st August 1997 and ending with the day the Finance (no.2) Bill, 2009 receives the assent of the President shall be deemed to be and to have always been for all purposes, as validly and effectively taken or done as if the amendments made by sub-section (1) had been in force at all material times and notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or other authority.
6. In the light of the aforesaid analysis, I allow the Revenues appeal in as much as the impugned order is modified to the extent that the duty liability for the period 1999-2000 is ordered to be fixed under the said Rule 96ZP(3).
(Pronounced in the open court on 10.03.2016) (R.K. Singh) Member (Technical) Bhanu 6 E/2813/2009-EX(SM)