Custom, Excise & Service Tax Tribunal
M/S. Vidya Ispat Udyog Pvt. Ltd vs C.C.E., Rohtak on 24 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing : 24.07.2015
For Approval & Signature :
Honble Mr. S.K. Mohanty, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Appeal No. E/2832/2006-EX[SM]
[Arising out of Order-in-Original No.19/AYUKT/RP/2006, dated 31.05.2006 passed by the C.C.E., Rohtak]
M/s. Vidya Ispat Udyog Pvt. Ltd Appellant
Vs.
C.C.E., Rohtak Respondent
Appearance Mr. C.S. Arya, Consultant - For Appellant Mr. R.K. Mishra, DR - For Respondent CORAM: Honble Mr. S.K. Mohanty, Member (Judicial) Final Order No._54295/2015, dated 24.07.2015 Per Mr. S.K. Mohanty :
This appeal is directed against the impugned order dated 31.05.2006, passed by the C.C.E, Rohtak. The Brief facts of the case are that the appellant is engaged in production of MS ingots, billets of non-alloyed steel falling under chapter 72 of the Central Excise Tariff Act, 1985 and were working under compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 read with Rule 96 ZO of erstwhile Central Excise Rules, 1992. The appellant commenced its production with effect from 08.05.1998. Based on the Compounded Levy Scheme, the Department determined the annual capacity of the appellant unit under Induction Furnace Annual Capacity Determination Rules, 1997 and duty liability of Rs. 5,83,334/- per month was fixed, which was required to be paid in two equal instalments by the appellant. Since there was no regular electricity supply to the appellants unit by grid, the manufacturing activity was commenced with the aid of DG set. Due to technical fault in the DG set, there was no regular production activity. Therefore, appellant filed the abatement claim of Rs. 92,42,688/- under Rule 96ZO (2) of the said Rules. The abatement claim of the appellant to the tune of Rs.52,99,917/-, for the period January, 1999 to December, 1999 was allowed and abatement claim of Rs. 39,42,771/-, for the period 09.05.1998 to 04.01.1999 was disallowed in the impugned order on the ground that the conditions of the Rules have not been fulfilled by the appellant in-as-much-as the appellant had not intimated the electric meter reading. The disallowance of abatement claim is the subject matter of the present dispute.
2. Shri C.S Arya, ld. consultant for the appellant submits that the production activity commenced in the factory on 08.05.1998 with the aid of 2500 KV DG set and due to technical condition, the DG set did not work properly for which the production activity was hampered form time to time. He further submits that since there was no electricity connection by the grid, there was no scope on the part of the appellant to intimate the electric meter reading to the Central Excise authorities. He also submits that since the suspension of production activity from time to time was intimated to the Department, the appellant could not be denied the abatement claim as provided under the statute. To support his stand that abatement cannot be denied on procedural ground, ld. Consultant relied on the decision of the Honble High Court of Punjab and Haryana in the case of CCE, Chandigarh Vs. Dutt Multimetals Ltd. [2010 (254) ELT 461 (P & H)], and the decisions of this Tribunal in the cases of Aswad Steels and Alloys (P) Ltd. Vs. CCE, Meerut-I [(2009 (243) ELT 370 (Tri.-Del.)], CCE, Kanpur Vs. Mahavir Iron Industries Pvt. Ltd. [2004 (175) ELT 272 (Tri.-Del)] and CCE, Kanpur Vs. Shatabdi Steels Pvt. Ltd.[2004 (176) ELT 774 (Tri.-Del.)].
3. On the other, hand Shri RK Mishra, ld. Departmental Representative appearing for the Revenue submits that since the conditions of Rule 96ZO (2) of the Rules read with sub-section 3A of Section 3 of Central Excise Act, 1994 have not been fulfilled by the appellant in entirety, the abatement provided in the said Rules was not available to them.
4. Heard both sides and perused the records.
5. I find that the ld. Commissioner has denied the abatement benefit to the appellant on the sole ground that the electricity meter reading was not intimated to the Department. The fact of suspension of production in the factory of the appellant has not been disputed in the impugned order. While claiming abatement for different periods, the appellant had clearly intimated to the Department regarding the closure of the furnace. Thus, in my opinion, the substantive right cannot be denied to the appellant. In this context, I find support from the decision of this Tribunal in the case of Aswad Steels and Alloys (P) Ltd. Vs. CCE, Meerut-I (supra), cited by the appellant that the benefit cannot be denied for the mere fact of non-disclosing of electric meter reading. The relevant paragraph of the said decision is extracted below:-
4.?We have carefully considered the submissions made by both sides. The very fact that the Assistant Commissioner in the letter of the appellant on 26-9-97 had allowed abatement of 15 days shows that this was based on inspection of the factory and also takes us to conclusion that the factory was not functioning during the period and this was not disputed by the Revenue. Further, with regard to second period also the appellant had intimated on 31st October 1997 about the closure from 1-11-97. They had also intimated the closing balance and stock of MS ingots and also informed the Revenue that they had started production again. We find only one condition under Rule 96ZO(2) that intimation regarding reading of the electricity meter to Assistant Commissioner, Central Excise with a copy to Range Superintendent , Central Excise, has not been fulfilled by the appellants. However, the appellants were not using power supply from electricity board and therefore, they could not have given electricity meter reading. Further, the intimation has not been challenged. We find that all other requirements have been fulfilled and the Department also is not contesting that factory had remained closed but the claim for abatement has been rejected only on the ground that reading of electricity meter has not been given to the Department. Under these circumstances, we consider that rejection was only on technical ground in view of the fact that factory was running only on DG sets and this is not disputed by the Department at all. Further, the Honble Punjab & High Court in the case of CCE, Chandigarh Vs. Dutt Multimetals Ltd. (supra) have held that sending notice in writing to jurisdictional authorities regarding closure/restart of production by the assessee, the same would be sufficient compliance of clause (b) and (d) of Rule 96ZO (2) of the Rules.
6. In view of the above settled principles of law, I do not find any merit in the impugned order and thus the appeal filed by the appellant is allowed with consequential benefit.
[Operative portion pronounced in the open court] (S.K. Mohanty) Member (Judicial) SSK -6-