Custom, Excise & Service Tax Tribunal
M/S. Cosmos Ispat (P) Ltd vs Cce, Raipur on 26 March, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III EXCISE APPEAL NO. 5009 OF 2004-SM [Arising out of Order-in-Original No. 51/Sec.3A/Commr/2004/3823 dated 30.06.2004 passed by the Commissioner, Central Excise, Raipur] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. Cosmos Ispat (P) Ltd. Appellant Vs. CCE, Raipur Respondent
Appearance:
None for the Appellants;
Shri M.M. Singh, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 26th March, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
None appeared on behalf of the appellants. By letter dated 30th June, 2008 the appellants requested to decide the matter in their absence on the basis of written submissions. Heard learned D.R. on behalf of the Revenue.
2. The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Hot Re-rolled products of non-alloy steels falling under Chapter 72 of the Schedule to Central Excise Tariff Act, 1985. They were registered with the Central Excise Department for manufacturing excisable goods in the month of May, 1997. Their mill was closed from 1.8.1997 to 18.11.97, which was duly informed to the Central Excise office. From September, 1997 Compounded Levy Scheme under Section 3A of the Central Excise Act was introduced on iron & steel products. By letter dated 17.11.97 the appellants declared various parameters of the mill for the purpose of determination of Annual Capacity of Production (ACP) and duty liability. They opted for payment of duty under Rule 96ZP(3) of the erstwhile Central Excise Rules, 1944. By impugned order dated 30th June, 2004 the Commissioner held that the appellants were required to pay duty of Rs. 1,72,725/- per month in terms of order dated 20.11.97 from 1.9.1997 onward without abatement or relief.
3. The main contention of the appellants is that their factory was closed down from 1.8.97 to 18.11.97 and they filed declaration for determination of ACP by letter dated 17.11.97. They opted for payment of duty under Rule 96ZP(3) of the Rules on 18.11.97 and, therefore, demand of duty prior to 17.11.97 is not sustainable. In their written submissions they stated that since there was no production in their unit prior to 17.11.97, there cannot be any demand of duty. In support of their contention, they filed they submitted electricity bill for the month of August, September & October, 1997.
4. Learned D.R. on behalf of the Revenue submits that Sub-rule (3) of Rule 96Z(P) of the said Rules provides that if a manufacturer having a total furnace capacity of 3 M.T. installed in his factory so desired, he may from 1st September, 1997 to 31st March, 1998 or any other financial year, as the case may be, pay a sum of Rs. 5 lakhs per month in two equal installments. He submits that there is no dispute that the appellants factory having a total furnace capacity of 3 M.T. installed in their factory and therefore, they are liable to pay duty from 1st September, 1997. He also submits that the Honble Supreme Court in the case of CCE vs. Venus Castings (P) Ltd., reported in 2000 (117) ELT 273 (SC) held that option under Section 3A of Central Excise Act, 1944 cannot be changed. He also submits that Rule is very clear and, therefore, the appellants are liable to pay duty from 1.9.97 even if there was no production.
5. After hearing learned D.R. and on perusal of the records, I find that Compounded Levy Scheme under Section 3A was introduced in from September, 1997. The production in the appellants factory was closed down from 1.8.97 to 18.11.97. The appellants applied for determination of Annual Production Capacity by their letter dated 17.11.97. They opted for payment of duty under Rule 96ZP(3) on 17.11.97. Sub-rule (4) of Rule 96ZP provides that in case a manufacturer opt to pay duty liability in terms of Sub-rule (3) he shall inform the same to the Commissioner Central Excise. On close reading of Sub-rule (3) and (4) of Rule 96ZP, it apepars that the manufacturer shall inform to the Commissioner for availing facility of payment of duty under Sub-rule (3) of the said Rules. In the present case, I find that mill was closed down prior to 17.11.97, therefore, there is no scope of filing option and payment of duty prior to that period. Learned D.R. submits that the appellants opted for payment of duty under Sub-rule (3) and, therefore, they are not eligible for abatement of duty under Sub-rule (3) of the said rules. In my view, this is not a case of claim of abatement. In other words it is a case where mill was closed down prior to 17.11.97 and option was filed on 18.11.97, which would be prospectively. The Tribunal in the case of CCE, Hyderabad vs. Handum Iron & Steel Enterprises Ltd., reported in 2008 (221) ELT 552 (Tri.-Bang.) held that the assessee opted for scheme under Rule 96ZP(3) of erstwhile Central Excise Rules, 1944. The benefit under proviso to erstwhile Section 3A(2) of Central Excise Act, 1944 would be available during the closure of mill. The relevant portion of the order of the Tribunal in the case of Handum Iron & Steel Enterprises Ltd. (supra) the Tribunal held as under:-
10.1 Further Revenue has not appealed against the decision of the tribunal in Malviya Steel case, it should be further kept in mind that the Apex Court in the Venus Castings case and Supreme Steels & General Mills case has not referred to the proviso to Section 3A(2). The benefit of abatement from payment of duty for the period of closure of mills under Section 3A(2) is not the subject matter in the above mentioned decisions of the Apex Court, in fine, by following the ratio of the above mentioned tribunals decision, we hold that the appellant is not liable to pay duty during the period of closure of factory. Though the order of the Commissioner in dropping the demand is correct, he has not given proper reasons for the same. Anyhow for reasons stated above and also in view of the decided case laws in favour of the respondents, we dismiss revenues appeal.
6. In view of the above discussion, I find that in the present case, the appellants factory was closed during the period 1.8.97 to 17.11.97 and the demand of duty prior to 17.11.97 is not sustainable. Accordingly, the impugned Order is modified and it is held that the appellants are liable to pay duty from 17.11.97. Appeal is disposed of in the above terms.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK