Punjab-Haryana High Court
Banta Singh Kartar Singh Iron And Steel ... vs Cegat on 6 April, 2004
Equivalent citations: 2004(170)ELT271(P&H)
Author: Hemant Gupta
Bench: Hemant Gupta, N.K. Sud
ORDER Hemant Gupta, J.
1.The challenge in the present writ petition is to the order dated 8-4-2003 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (for short the Tribunal). Whereby the delay in filing of appeal against the order dated 27-4-1998 passed by the Commissioner, Central Excise, Chandigarh was not condoned and consequently the appeal was dismissed.
2. The petitioner is engaged in the production and manufacture of various Hot Re-rolled products of Iron and Steel such as bars, rods, rounds, square CID bars, angle etc. The Central Government in terms of Sub-section (1) of Section 3A of the Central Excise Act, 1944 issued notification dated 25-7-1997 vide which hot re-rolled products of non-alloy steel were notified for the purpose of leviability of Central Excise duty on the basis of annual capacity of production in term of Section 3A of the Central Excise Act, 1944. By virtue of said notification the items produced or products being manufactured by the petitioner were brought within the ambit of Section 3A of (hereinafter referred to 1944 Act) and the petitioner became liable to pay central excise duty in terms of Section 3A of 1944 Act w.e.f. 1-9-1997.
3. The petitioner has alleged that the petitioner in the year 1996-97 was manufacturing iron and steel products of different sizes by operating two rolling mills in the same factory but on account of the above notification the duty was to be paid on annual capacity of production therefore, the petitioner decided to operate only one rolling mill at a time by maintaining one electric motor and fly- wheel and accordingly furnished declaration.
4. The petitioner requested the Commissioner Central Excise to redetermine the annual capacity vide letter dated 8-9-1997 inter alia on the ground that the said capacity has been determined without hearing the petitioner. The Commissioner, Central Excise vide order dated 27-4-1998 determined the annual , capacity of the petitioner. However, show cause notice dated 30-10-1998 was is- sued claiming duty of Rs. 5,9,588/- for the period from April 1998 to June 1998 on the basis of annual capacity determination order dated 27-4-1998 passed by the Commissioner, Central Excise.
5. It is alleged by the petitioner that the said show cause notice is still pending but duty was demanded on the basis of annual capacity determination order dated 27-4-1998 passed by the Commissioner, Central Excise. The said demand notice for the recovery dated 14-6-2002 was challenged by the petitioner by way of writ petition under Article 226 of the Constitution of India before this Court in CWP No. 9629 of 2002. The said writ petition was dismissed on January 13, 2003 with liberty to pursue the remedy of appeal if so advised.
6. Thereafter, the petitioner has filed an appeal under Section 35B of Central Excise Act, 1944 before the Tribunal in January, 2003 along with an application for condonation of delay of 1634 days in filing the appeal. The learned Tribunal vide impugned order dated 8-4-2003 has dismissed the application for condonation of delay on the ground that the delay of more than 4 years in filing the appeal has not been satisfactorily explained by the petitioner.
7. In the written statement filed on behalf of the respondents it has been stated that after the issuance of show cause notice dated 30-10-1998, the Larger Bench of the Tribunal held in Mohindra Steel Ltd. v. Commissioner of Central Excise, Chandigarh - 2002 (145) E.L.T. 290 that the appellant shall discharge the duty liability under the scheme according to capacity determined by the Commissioner. It has been held by the Larger Bench of the Tribunal that the compounded levy scheme is a separate scheme and the recovery of the amount under this scheme for re-rollers is not covered by the general time limit pre- scribed under Section 11A of the 1944 Act and no show cause notice is required to be issued for such recoveries under compounded levy scheme.
8. It may be stated that the petitioner has since deposited the entire amount of Rs. 25,90,989/- in terms of notice of demand dated 14-6-2002 whereby the certificate for the recovery of the amount was issued to realise the amount in accordance with the provisions of the Customs (Attachment of Property of De- faulters of Recovery of Customs Dues) Rules, 1995.
9. We have heard the learned Counsel for the parties and are of the opinion that the order passed by the learned Tribunal rejecting the application for condonation of delay cannot be sustained and is liable to be set aside. As per the facts available on record a show cause notice was issued to the petitioner on 30-10-1998 Annexure P 6 for determination of the amount, if any, payable by the petitioner. There is no order passed in pursuance of the said show cause notice. However, the respondents have relied upon the the Larger Bench judgment of the Tribunal in Mohindm Steel Ltd. to initiate recovery proceedings of the amount of duty on the basis of the order passed by the Commissioner determining the annual capacity of the petitioner.
10. The Tribunal vide its judgment dated 8-4-2002 has decided that the amount can be recovered on the basis of an order passed by the Commissioner determining the annual capacity of production. Recovery certificate has been is- sued soon thereafter i.e. on 14-6-2002, The petitioner earlier challenged such recovery certificate by way of writ petition before this Court which was dismissed with liberty to the petitioner to avail the alternative remedy of appeal under Section 35B of the Act. The application for condonation of delay in filing the appeal against the order determining the annual capacity of the production of the petitioner has been dismissed on the ground that no sufficient cause has been shown.
11. Once show cause notice was issued to the petitioner to determine the amount due and payable by the petitioner, it was reasonable for the petitioner to draw an inference that an order in pursuance of such show cause notice would be passed. However the recovery certificate has been issued on the basis of judgment of the Tribunal dated 8-4-2002 which is not in the case of the petitioner. Therefore, delay in filing the appeal is sufficiently explained. It cannot be lost sight of the fact that the petitioner has deposed an amount of Rs. 25,90,989/- i.e. the amount mentioned in the recovery certificate.
12. In view of above, we find that the order of the Tribunal declining to condone the delay is not sustainable consequently, the said order is set aside and the writ petition is allowed with no order as to costs. The learned Tribunal is directed to decide the appeal filed by the petitioner on merits in accordance with law.