Customs, Excise and Gold Tribunal - Tamil Nadu
Chamundi Steel Casting (P) Ltd. vs Cce on 16 May, 2000
Equivalent citations: 2000(93)ECR165(TRI.-CHENNAI), 2000(125)ELT1243(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. In this appeal, the simple issue before us arises out of para 13 of Order-in-Original No. 6/99 dated 29.1.1999 passed by Commissioner of Central Excise after consideration of the matter de novo in terms of this Tribunal's final order No. 1404/98 dated 23.7.1998.
2. Heard Shri B.V. Kumar, Ld. Advocate for appellants, who submits that the order impugned has denied abatement of duty under proviso to Section 3A(3) of CEA of 1944 only on the ground that the entire factory was never closed for a continuous period of 7 days as at any given time one or more furnaces were always operating, though others were closed. He cites Seth Alloys (P) Ltd. as in 1999 (34) RLT 68 (CEGAT). Ld. Advocate submits that the word 'factory' as defined in Section 2(e) ibid when applied in their case would mean that each furnace would be a separate factory, because "factory" included precincts thereof. Ld. Advocate cites DCM Ltd. as in 1978 ELT J-121 : 1978 Cen-Cus 55D (Del); ICI India Ltd. as in ; and JG Glass Ltd. as in . Secondly, Ld. Advocate submits that since they had opted to operate under Rule 96ZO, and since Rule 96ZO(3) under which duty was to be paid was suspended by Hon'ble High Court of Delhi, therefore demand was not maintainable. He cites Handum Iron and Steel Enterprises Ltd. v. CCE as in 1999 (34) RLT (CEGAT) : 2000 (90) ECR 345 (T) and Maharishi Commerce Ltd. as in 1999 (34) RLT 918 (CEGAT).
3. Heard Ld. DR Shri S. Kannan, who submits that even from the definition of factory in Section 2(e), it does not follow that each furnace would be a separate factory. Secondly, he submits that the order impugned has only fixed the ACP and there is not quantified duty demand under Rule 96ZO(3) before us for consideration at present. Therefore, this argument of Ld. Advocate is premature. He prays for dismissal of the appeal.
4. We have carefully considered the records of the case and these submissions. For convenience proviso to Section 3A(3) is reproduced below:
Provided that, where a factory producing notified goods did not produce the notified goods during any continuous period of not less than seven days, duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed.
5. A plain reading thereof shows that only when no notified goods are produced in a factory for 7 continuous days, then duty abatement on these goods is available. In the order-in-original impugned Ld. Commissioner has also interpreted the said proviso in this manner and held that since at least one furnace was always operational, such a period of 7 days of total non-production of the notified goods was not demonstrated by appellants and hence the abatement was denied. Ld. Advocate has not placed before us any evidence to contradict the above fact recorded by Ld. Commissioner. Instead, his submission that each furnace is an independent factory is not acceptable to us. As per Section 2(e), even furnaces located in outside the factory shed but within its precincts would still belong to that factory as a whole. If each furnace was to be regarded as a separate factory, then there would have to be separate orders fixing ACP thereof as also separate registrations under Rule 174 etc. Such is not the case here. The facts in JG Glass Ltd. (supra) pertained to when a new unit was culled out of an existing old unit. Such is not the case here and hence that decision stands distinguished. The definition of a factory in DCM Ltd. (Supra) was a very wide one and it was held that a factory includes the whole premises. Ld. Advocate's submissions are to the contrary, that within the whole premises each furnace is a different factory. Hence this case law stands distinguished. The concept of a mobile factory examined by Hon'ble Tribunal in ICI India Ltd. (supra) is also distinguished on facts here as these furnaces are not mobile.
6. The second submission of the Ld. Advocate with respect to suspension of operation of Rule 96ZO(3) by Hon'ble High Court noted above is also of no help to the appellants. What has been adjudicated by the order impugned is merely denial of duty abatement for the period in question and not a confirmation of any specified amount payable under Rule 96ZO(3). The Hon'ble High Court has not suspended or stayed the operation of the proviso to Section 3A(3). Therefore, this argument is, at best, premature and the decision of Handum Iron and Steel Enterprises (supra) is of no help to Ld. Advocate. In Seth Alloys (supra) it was held that no separate claim for duty abatement is necessary. There is no dispute here that a separate claim was required to be made.
7. In view of the aforesaid analysis, we do not find any merit in this appeal, and it is therefore dismissed.
(Pronounced on 16.5.2000).