Custom, Excise & Service Tax Tribunal
Rajshree Industries vs Jodhpur 1 on 26 September, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT -III
Excise Appal No. E/51516 /2018-EX [SM]
[Arising out of Order-in-Appeal No. 354(SRM) CE JDR 2018
dated 27.03.2018 passed by the Commissioner (Appeals),
Central Excise & Central Goods and Service Tax, Jodhpur.]
M/s. Rajshree Industries ...Appellant
Vs.
CGST, C.C. & C.E.-Jodhpur-I ... Respondent
Present for the Appellant : None Present for the Respondent : Mr. K. Poddar, (AR). Coram: HON'BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing:06.09.2018 Date of pronouncement: 26.09.2018 FINAL ORDER NO. 53040/2018 PER: RACHNA GUPTA The present appeal is against the order in appeal no.2144 dated 27.03.2018.
2. The appellants herein are engaged in manufacture of Stainless Steel patta /patti having a Central Excise Registration. Appellant is working under the special procedure for compound levy scheme for SS Patta/ Patti prescribed vide notification no. 17/2007 CE dated 01.03.2007 issued under Rule 15 of Central Excise Rules. The appellant had filed a claim for refund for Rs. 43920/- in respect to duty paid for the month of November 2016
2|Page E/5156/2018-[SM] and February 2017, on the ground that they have paid the excise duty for the entire month of November 2016and February 2017 whereas the cold rolling machines operating during those months were dismantled. It was mentioned that two no. of machines got dismantled w.e.f. 23.11.2016 to 30.11.2016 and one machine got dismantled and the non operating period thereon was 01.02.2017 to 14.02.2017.
3. The said refund for proportionate excise duty pertaining to the said period was rejected vide the order of original adjudicating authority bearing no. 2090 dated 30.05.2017, on the ground that the appellant have not opted for the first time under the compounded levy scheme in both these months and as such the conditions of the impugned notification remains unfulfilled. The facility of abatement on pro rata basis is therefore not available to the appellant. Being aggrieved an appeal was filed the same has been rejected vide the order under challenge resultantly the present appeal.
4. I have heard both the parties. It is impressed upon on behalf of the appellant that the procedure contained in notification 17/2007-CE dated 01.03.2007 prescribes the duty demand on no. of cold rolling machines manufacturing SS Patta/ Patti. It is alleged that the department had wrongly demanded duty on non
3|Page E/5156/2018-[SM] operating machines the same has wrongly been confirmed. Decision of Hon'ble High Court of Rajasthan in the case of Collector of Central Excise Vs. Jupiter Industries [2006 (206) ELT 1195 (Raj.)] has been relied upon appeal is prayed to be allowed.
5. While rebutting these arguments ld. DR has justified the order. It is mentioned that even the authority as relied upon by the appellant has been clearly distinguished by the Commissioner Appeals holding that in the aforesaid judgment the appeal was allowed against duty payment for subsequent month only. But present is the case of refund of proportionate duty on non working/ operating machines from the monthly payment of duty.
6. After hearing both the parties considered opinion of mine is as follows:
The issue to be decided in this case is as to whether the refund claim of the proportionate Central excise duty deposited for the non working period of newly added machines is admissible to appellant, or otherwise. For the purpose, the impugned notification is relevant. The same reads as follows:
"(1) A manufacturer whose application has been granted under paragraph 2 shall pay a sum calculated at the rate specified in this notification, subject to the conditions herein laid down, and such payment shall be in full
4|Page E/5156/2018-[SM] discharged of his liability for duty leviable on his production of such cold re-rolled stainless pattas/pattis, or aluminum circles during the period for which the said sum has been paid:
Provided further that when a manufacturer makes an application for the first time under paragraph 2 for availing of the procedure contained in this notification, the duty liability for the month in which the application is granted shall be calculated on the pro-rata basis of the total number of days in that month and the number of days remaining in the month from the date of such grant:.
And para 6 of Notification No. 17/2007-CE dated 01.03.2007 reads as follows:
"(1) In the case of a manufacturer who commences production for the first time or who recommences production after having ceased production for a continuous period of not less than there months, and who has been permitted by the Assistant Commissioner or the Deputy Commissioner of Central Excise as the case may be, under paragraph 2 to avail of the procedure, the amount payable by him for the first month or part thereof, as the case may be, shall be provisionally calculated on the basis of his declaration of the maximum number of cold rolling machines that are or are likely to
5|Page E/5156/2018-[SM] be installed by him or on his behalf during the such period".
7. In the present case, I observe that the appellant had applied for addition of cold rolling machines and the permission were granted by the superintended Jodhpur. It is thereafter that the appellant filed the impugned refund claim for duty deposited for the non working period of machines. The aforesaid notification has been issued under the provisions of Rules 15 of Central Excise Rules, 2002. Said rule provides for special procedure for payment of duty on the basis of such factors as may be relevant to production of such goods. This notification gives an option to the manufacturer of SS Patta/ Patti which are subjected to the process of cold rolling, whereby assessee can pay excise duty on the basis of no. of cold rolling machines installed for cold rolling of those goods.
8. Since this notification is issued under Central Excise Rules the provision thereof cannot be construed in the manner which is against Central Excise Act. Rule 3 of Central excise Act 1994 says that the duty is leviable on the manufacture of the excisable goods. Hence, when no cold rolling machine was installed or any of the machine was not operational question of payment of duty including such non-operational/ non-installed machine shall not
6|Page E/5156/2018-[SM] arise. Accordingly I find that the interpretation as taken by the adjudicating authorities below that, "the appellant is already working under compounded levy scheme since long back and they have not opted for first time under the said scheme in the impugned demand i.e. November 2016 and February 2017" is opined not sustainable.
I draw my support from the decision of Jupiter Industries (supra) as cited by the appellant wherein it was held that payment of duty after dismantling of machines and discontinuance of production is not contemplated by Rule 96 ZB and 96 ZB(2) of Central Excise Rules, 1944. Sub Rule 2 of Rule 96 ZB lays down the method of calculation of sum payable. It was held that these rules in no way stipulates that any sum at the compounded rate is payable towards duty for the machine which is not in existence with the manufacturer nor does it say that no refund claim can be made with regard to excess payment made. The decision further clarified that central excise refund claims are made in terms of Section 11 B of Central Excise Act. It is clear from Rule 96 ZA that Patts/ Pattis manufacturers can opt for the special procedure. It was held that none of these rules contemplate payment of duty after a machines has been dismantled as production of machines discontinued.
7|Page E/5156/2018-[SM]
9. The above decision is squarely applicable in the instant case where the appellant had paid the duty for the months of November to February despite that all cold rolling machines were not operating for certain no. of days, as mentioned above, during the month of November 2016 to February 2017. I therefore hold that the appellant is entitled for the proportionate refund of duty for the days when the cold rolling machines were not operational. The order under challenge is therefore held not sustainable, resultantly is set aside. Appeal accordingly stands allowed.
(Pronounced in the open court on 26.09.2018) (C.L. MAHAR) (RACHNA GUPTA) MEMBER(TECHNICAL) MEMBER (JUDICIAL) Sakshi