Custom, Excise & Service Tax Tribunal
Puneet Steels Alloys Pvt.Ltd vs Cce, Jaipur-I on 9 June, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Court No.III
Appeal No. E/1727/2006-EX[DB]
(Arising out of OIA No. 78 (MPM)/CE/JPR-I/2006 dt.24.3.2006 passed by Commissioner of CCE (Appeals), Jaipur)
Date of Hearing: 27.05.2015
Date of Pronouncement:09.6.2015
For approval & Signature:
Honble Mr. Rakesh Kumar, Member (Technical)
Honble Smt.Sulekha Beevi C.S., 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?
No
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Puneet Steels Alloys Pvt.Ltd. Appellant
Vs.
CCE, Jaipur-I Respondent
Appearance:
Present for the Appellant: Shri S.C.Jain, Advocate Present for the Respondent: Shri R.K.Gupta, DR Coram: Honble Mr. Rakesh Kumar, Member (Technical) Honble Smt.Sulekha Beevi C.S., Member (Judicial) Final Order No.51798/2015 Per: Sulekha Beevi C.S. The appellant has filed this appeal challenging duty demand under sub-rule (3) of Rule 96ZO of Central Excise Rules, 1944 basing on the annual capacity production determined.
2. The facts of the case are that the appellant are engaged in the manufacture of MS ingots under sub-heading 7206.90 and 7207.90 of the Schedule to the Central Excise Tariff Act. The goods manufactured by the appellant were notified by Notification No.30/97-CE (NT) dt.1.6.97 as amended vide Notification No.43/97-CE (NT) dt.30.8.97 issued under section 3A of the Central Excise Act, 1944 read with Rule 96ZO chargeable to duty under compounded levy scheme. The appellant vide their letter dt.7.8.97 opted for compounded levy scheme as provided under the above provisions of law. On this request, the Commissioner of Central Excise, Jaipur-I determined the annual capacity of the furnace of the appellant as 9600 MTs and informed the same to the appellant vide letter dated 22.10.1997. On the basis of annual capacity so determined, the assessee was required to pay Rs.5 lakh per month towards duty for the period 1.9.1997 to 31.3.1998. Against the total liability of Rs.25 lakhs for the above period, the assessee deposited Rs.17,73,648/-. Out of the deposited amount, Rs.3,90,000/- (Rs.2,50,000/- on 15.12.98 for December, 98, Rs.40,000/- on 21.12.98 for December, 98 and Rs.1,00,000/- on 11.1.99 for January, 99) only was deposited by the assessee within the stipulated period. Remaining amount of Rs.13,83,648/- was deposited after expiry of period provided under sub-rule (3) of Rule 96ZO. Further, an amount of Rs.7,26,352/- was outstanding towards duty liability for the period September, 1998 to January, 1999.
3. A show cause notice dated 25.3.1999 was issued to the appellant to show cause as to why the following sums should not be recovered from them:
(a) an amount of Rs.7,26,352/- towards central excise duty for the period September, 1998 to January, 1999 under section 11A of Central Excise Act, 1944,
(b) interest of Rs.57,874/- @ 18% per annum on the duty Rs.13,83,648/- for the period September, 1998 to January, 1999 and deposited belatedly and also interest on the duty of Rs.7,26,352/- was outstanding,
(c) penalty under Rule 209 of Central Excise Rules, 1944 and
(d) penalty of Rs.21,10,000/- equal to the duty amount.
4. The show cause notice was defended by the appellant stating that they had informed the department vide their letter dated 26.5.1998 that they have revoked the option to pay duty on the basis of annual production capacity and opted to pay duty on the basis of actual production. After adjudication, the duty demand was confirmed and penalty was also imposed under Rule 209 by the Joint Commissioner vide Order-in-Original dated 14.9.99. It was therein held that no letter of request dated 26.5.1998 of the appellant had reached the office of the Commissioner. The action against the assesse imposing penalty as per third proviso to Rule 96ZO was kept in abeyance.
5. Aggrieved by the said order, the appellant filed appeal alongwith stay application before the Commissioner (Appeals). The Commissioner (Appeals) vide order dated 4.8.2000 directed the appellant to deposit dues within three weeks time. Due to non-compliance of the stay order, the appeal was rejected vide order dated 3.11.2000. The appellant then approached this Tribunal and vide stay order dated 27.2.2001,this Tribunal allowed the stay application waiving pre-deposit. This Tribunal vide Final Order dated 17.7.2001 remanded the matter to the Commissioner to consider the same in de novo adjudication with the direction to look into the issue whether the contention that letter dated 26.5.98 was sent by the appellant was genuine or not. Thereafter the Commissioner (Appeals) has passed this impugned order upholding the demand of duty. Commissioner (Appeals) held that on enquiry about the letter dated 26.5.98, no letter dated 26.5.98 had reached the office of the Commissionerate. Being aggrieved by the above order of the Commissioner (Appeals), the appellant has filed the present appeal.
6. Shri S.C.Jain, learned Counsel appearing for the appellant, contended that the duty demand is unsustainable. According to him a letter dated 26.5.98 was sent by the appellant under UPC and urged that the appellant had informed the department that they have opted out of the compounded levy scheme and had also stated in the letter that they wished to discharge their duty liability on actual production under section 3A (4) of the Central Excise Act. That, therefore, the appellant is not liable to pay duty on annual capacity of production as determined by the Commissioner.
7. Against this, Shri R.K.Gupta, learned DR submitted that no such letter as contended by the appellant was received in the office of the Commissionerate. He also challenged the veracity of the photocopy of the letter produced by the appellant. Moreover, that once the appellant opted for the scheme under sub-rule (3) of Rule 96ZO, they cannot opt out of the scheme during the period for which duty liability had already been fixed basing upon the annual capacity of production. He relied on decision of the apex court in CCE vs. Venus Castings Pvt.Ltd.-2000 (117) ELT 273 (SC).
8. Heard both sides and perused the records carefully.
9. The foremost issue that poses for consideration is whether the letter dated 26.5.98 as contended by appellant was received in the office of the Commissionerate. This is a question of fact and the burden lies purely upon the appellant to establish the same. According to the appellant, the letter was sent Under Postal Certificate (UPC) and the receipt thereof is not traceable. Under the provisions of Rule 195 of the Indian Post Office Rules , 1933 'Certificate of Posting' is granted to the public to afford an assurance that letters and other articles for which no receipts are granted by the Post Office and entrusted to servants and messengers for posting have actually been posted. Therefore, the seal of UPC at best can only presume that the letter was sent. It cannot draw any presumption that the letter was served/delivered to the addressee. In the present case, the respondent have not only disputed the receipt of the letter but also its veracity. The burden rests heavily upon the appellant to establish that the said letter was served on the respondent. In the case of State of Maharashtra vs. Rashid B.Mulani reported in 2006 (1) SCC 407, the apex court had occasion to consider reliability of letter issued under UPC. The Apex Court in para 14 of its judgement has held as under:-
14. A certificate of posting obtained by a sender is not comparable to a receipt for sending a communication by registered post. When a letter is sent by registered post, a receipt with serial number is issued and a record is maintained by the post office. But when a mere certificate of posting is sought, no record is maintained by the post office either about the receipt of the letter or the certificate issued. The ease with which such certificates can be procured by affixing ante-dated seal with the connivance of any employee of the post office is a matter of concern. The Department of Posts may have to evolve some procedure whereby a record in regard to the issuance of certificates is regularly maintained showing a serial number, date, senders name and addressees name to avoid misuse. In the absence of such record, a certificate of posting may be of very little assistance, where the dispatch of such communication is disputed or denied as in this case.
10. In fact, this Tribunal had earlier remanded the matter to the Commissioner (Appeals) affording a further opportunity to the appellant to adduce evidence to establish whether the letter as contended was received in the office of the Commissionerate or not. A person can be said to receive a letter when it is delivered/served upon him. A letter sent under UPC does not give any presumption that the same is served upon the addressee. In this case, the respondent has not only disputed receipt of the letter but also its veracity i.e. photocopy of the letter produced by the appellant. On analyzing, the facts, evidence and the law placed before us, we are not able to hold that the letter dated 26.5.1998 had reached the office of the Commissionerate. Therefore, the contention of the appellant that they had informed the Department by letter dated 26.5.98 stating that the appellant opted out of the compounded levy scheme, does not find favour with us.
11. For argument sake, even if we assume that such letter was sent, it would be of no assistance to the appellant. There is nothing contained in sub-rule (3) of Rule 96ZO which permits the appellant to make a request to opt out of the scheme. The Apex court in Venus Castings Pvt.Ltd has held as under;-
10.?The schemes contained in Section 3A(4) of the Act and Rule 96ZO(3) or Rule 96ZP(3) of the Excise Rules are two alternative procedures to be adopted at the option of the assessee. Thus the two procedures do not clash with each other. If the assessee opts for procedure under Rule 96ZO(1) he may opt out of the procedure under Rule 96ZO(3) for a subsequent period and seek the determination of annual capacity of production. An assessee cannot have a hybrid procedure of combining the procedure under Rule 96ZO(1) to which Section 3A(4) of the Act is attracted. The claim by the respondents is a hybrid procedure of taking advantage of the payment of lumpsum on the basis of total furnace capacity and not on the basis of actual capacity of production. Such a procedure cannot be adopted at all, for the two procedures are alternative schemes of payment of tax.
12. In the above judgement, it was observed by the Apex Court that in taxation measures composition schemes are not unknown and when such scheme is availed of by the assessee it is not at all permissible for him to turn around and ask for regular assessment. Similar view was taken in Union of India vs. Supreme Steels & General Mills-2001 (133) ELT 513 (SC). The Apex Court therein held that the manufacturer cannot opt twice during one financial year first choosing to pay in accordance with sub-rule 3 of Rule 96ZO and thereafter to switch over to actual production basis under Section 3A(4) of the Act, in case it is less than the duty payable under sub-rule (3) of Rule 96ZO. In the present case, the department by its letter dated 22.10.1997 had passed the order determining the annual capacity of production of the appellant. In the said letter, the appellant was granted 10 days time to file objection. The appellant did not file any objection and has paid duty as determined during first month. It is obvious that the appellant had consented to the compounded levy scheme. If that be so, applying the principle laid in the judgements of the Apex Court as stated above, we find that the appellant cannot opt out of the scheme for the disputed period, after exercising his option to pay duty under sub-rule (3) of Rule 96ZO. Therefore, the duty demand of Rs.7,26,352/- is sustainable.
13. However, it is seen from the impugned order that penalty of Rs.2,50,000/- (Two lakh fifty thousand) is imposed under Rule 209 of the Central Excise Rules, 1944. We do not think that Rule 209 is attracted in the present case as the liability to pay duty was determined under sub-rule (3) of Rule 96ZO which by itself provided for levy of penalty in case of default. We, therefore, set aside the penalty of Rs.2,50,000/- imposed upon the appellant.
14. In the result, the impugned order is modified to the extent of setting aside the penalty of Rs.2,50,000/- and upholding the duty demand of Rs.7,26,352/-. The appeal is partly allowed.
(Pronounced on 09/6/2015)
(Sulekha Beevi C.S.) (Rakesh Kumar)
Member (Judicial) Member (Technical)
mk
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