Custom, Excise & Service Tax Tribunal
Mahalaxmi Metal Udhyog vs Ahmedabad-Ii on 7 March, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Excise Appeal No. 264 of 2012
(Arising out of OIA-24/2012-AHD-II-CE/MM/COMMR-A-/AHD Dated- 30/01/2012 passed by
Commissioner of Central Excise-AHMEDABAD-II)
Mahalaxmi Metal Udhyog .....Appellant
132, Gvvm, Industrial Estate, Odhav,
Ahmedabad, Gujarat
VERSUS
C.C.E.-Ahmedabad-ii ......Respondent
Custom House... First Floor, Old High Court Road, Navrangpura, Ahmedabad, Gujarat-380009 APPEARANCE:
None appeared for the Appellant Sh. Ghansyam Soni, Joint Commissioner (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 10219 /2022 DATE OF HEARING: 18.02.2022 DATE OF DECISION:07.03.2022 RAJU This appeal has been filed by M/s Mahalakshmi Metal Udhyog against confirmation of demand of Central excise duty and interest. The facts of the case are that the appellant was working under Notification No. 17/2007- CE dated 01.03.2007 which prescribed the levy of Central excise at compounded rate on the basis of the number of cold Rolling mills installed in the factory .
2. None appeared for the hearing though the matter was posted on 16.08.2019, 16.10.2019, 07.11.2019, 03.12.2019, 20.12.2019, 03.02.2020 ,12.03.2020, 09.04.2020, 13.12.2021, 12.01.2022 and 18.02.2022.
3. The learned AR pointed out that the appellant had sought to undertake the major repair work in their factory in the month of July 2011 and therefore vide letter dated 20.06.2011 they had informed the jurisdiction Assistant Commissioner that they will cease work from 01.07.2011 to 31.07.2011. On account of this they sought the abatement of duty payable for month of July 2011.
2|Page E/264/2012-DB 4. Learned AR Pointed out that both the lower authorities have stated
that there is no provision in Notification No. 17/2007 for abatement of duty. He also relied on the decision of Tribunal in the case of S. S. STRIPS PVT. LTD V.s CCE, AHMEDABAD-II [vide Order No. A/11629-11621/2018 dated 01.08.2018-CESTAT, AHMEDABAD and also on the decision of the Tribunal in the case of SETHI METAL INDUSTRIES Vs. COMMISSIONER OF C. EX., AHMEDABAD-2013 (294) ELT 603 (Tri.-Ahmd.)
5. We have considered the rival submissions. We find that the Notification No. 17/2007- CE dated 01.03.2007 prescribes a fix rate of monthly duty on the maximum number of Cold Rolling Machines installed in the factory. The notification provides for manufacturer to declare and the authorities to accept the Number of machines installed. Clause 3 and 8 of the Notification reads as under:-
"3. Discharge of duty liability on payment of certain sum. - (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 discharge of his liability for duty leviable on his production of such cold re-rolled stainless pattas/pattis, or aluminium circles during the period for which the said sum has been paid :
Provided that if there is revision in the rate of duty, the sum payable shall be recalculated on the basis of the revised rate, from the date of revision and liability for duty leviable on the production of stainless steel pattis/pattas, or aluminium circles from that date shall not be discharged unless the differential duty is paid and in case the amount of duty so recalculated is less than the sum paid, the balance shall be refunded to the manufacturer :
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 pro-rata on the 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.
(2) The sum payable under sub-paragraph (1) shall be calculated by application of the appropriate rate to the maximum number of cold rolling machines installed by or on behalf of such manufacturer in one or more premises at any time during three calendar months immediately preceding the calendar month in which the application under paragraph 2 is made.
(3) The sum shall be tendered by the manufacturer along with the application."
"8. Provision regarding factories ceasing to work or reverting to the normal procedure. - Notwithstanding anything contained in this notification, where a manufacturer who had availed himself of the procedure contained in this notification ceases to work or reverts to the normal procedure, the duty payable by him in the month during which he has availed himself of the procedure shall be calculated on the basis of the maximum number of cold rolling machines installed during the last month in the manner prescribed in paragraph 6 and the amount already
3|Page E/264/2012-DB paid for the month in accordance with paragraph 3 shall be adjusted towards the duty so calculated and on such adjustment if there is any excess payment it shall be refunded to the manufacturer and any deficiency in duty shall be recovered from the manufacturer.
Explanation. - A manufacturer, who ceases to work his factory for one or two shifts only, shall not be deemed to have ceased to work within the meaning of this notification."
5.1 The joint reading of the two clauses indicates that the observation of lower authorities that there is no provisions for abatement of duty for cease of work is misplaced. Clause 8 of Notification deals with the situations where the factory ceases to work or reverts to the normal procedure. The Clause 8 does not anywhere indicate if the ceasing of work of the factory is temporary or permanent. The explanation to Clause 8 clearly indicate that the partial ceasing of work will not about to ceasing of work. The clause 8 also the prescribed the manner in which the duty for the month in which the ceasing of work happened is to be calculated i.e. in terms of clause 3 of the notification. The clause 3 of the notification prescribed proportionate duty on the basis of Number of days of operation.
5.2 The decision relied upon by the Revenue in case of S. S. STRIPS PVT. LTD (Supra) relates to a situation where only few of the many installed machines were operational. In these circumstances, the case would not have qualified as ceasing of work in terms of clause 8 and therefore the benefit of clause 8 of Notification could not have been extended. Thus, the facts in the said case are significantly different. The Revenue has relied on the decision of the Single Member Bench in case of SETHI METAL INDUSTRIES (Supra). It is seen that the case is on identical on facts, however, the decision fails to take notice of clause 8 of the notification read with clause 3 does not preclude the temporary ceasing of work from benefit of the notification. In view of the above, it would appears that the decision of the Tribunal in the case of SETHI METAL INDUSTRIES is per incuriam. Moreover, being a decision of the Single Member bench it does not have a binding effect.
6. From the above discussion, it is apparent that the Notification No 17/2007does not require permanent ceasing of work in order to avail benefit of Clause 8 of Notification No 17/2007. Even temporary ceasing of work after following due procedure can entitle the manufacturer to avail; the exemption. Thus, the impugned order cannot be sustained.
4|Page E/264/2012-DB
7. In view of the above, the impugned order is set aside and appeal is allowed.
(Pronounced in the open court on 07.03.2022) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Prachi