2006 (2) TMI 382 - AT - Central Excise

Tribunal clarifies duty rate for goods produced in August '97, upholds demand, overturns penalty

The Tribunal held that the duty rate applicable for goods produced in August 1997 was 15% ad valorem, upholding the demand for duty at Rs. 300/- PMT. It ... Compounded Levy Scheme Issues:1. Interpretation of Notification No. 50/97 and Notification No. 57/97 regarding duty rates for goods manufactured and cleared in August 1997.2. Applicability of duty rates under Notification No. 50/97 as amended by Notification No. 57/97.3. Discrepancy in duty calculation and imposition of penalty.4. Absence of representation from the respondents during the appeal process.Issue 1: Interpretation of Notification No. 50/97 and Notification No. 57/97The case involved a dispute regarding the duty rate applicable to goods manufactured and cleared in August 1997 due to a change in the effective date of levy from 1-8-97 to 1-9-97. The confusion arose from the amendment of Notification No. 50/97 by Notification No. 57/97, which shifted the effective date of duty rates. The respondents argued that the duty liability should be discharged at the prescribed effective rate of 15% ad valorem. However, the Commissioner (Appeals) contended that for goods manufactured in a hot rolling mill with a nominal diameter not exceeding 160 mm in August 1997, the duty rate remained at Rs. 150/- PMT as per the notifications. The Tribunal held that the duty rate applicable for goods produced in August 1997 was 15% ad valorem, and upheld the demand for duty at Rs. 300/- PMT as per the prevalent practice during that period.Issue 2: Applicability of duty rates under Notification No. 50/97 as amended by Notification No. 57/97The revenue argued that the amended notifications did not specify the duty rate for goods manufactured before 1-9-97 but cleared in August 1997, asserting that the tariff rate of 15% ad valorem applied to such goods. The Tribunal clarified that the amended Notification No. 50/97 was not applicable to goods manufactured before 1-9-97, and upheld the duty demand at Rs. 300/- PMT for goods produced in August 1997, in line with the prevalent practice and uniformity in duty payable by the assessee.Issue 3: Discrepancy in duty calculation and penalty impositionThe adjudicating authority confirmed a duty of Rs. 26,196/- and imposed a penalty of Rs. 5,000/- on the respondents, which was set aside by the Commissioner (Appeals). The Tribunal agreed with the adjudicating authority's demand for duty at Rs. 300/- PMT for goods produced in August 1997, but found no need for the imposition of a penalty in the circumstances of the case. Consequently, the penalty imposed by the original authority was set aside.Issue 4: Absence of representation from the respondentsDespite notice and the absence of representation or a request for adjournment from the respondents, the Tribunal proceeded with the appeal based on the evidence on record. No cross-objection was filed by the respondents, leading to the disposal of the appeal based on the available evidence.In conclusion, the Tribunal allowed the revenue's appeal, setting aside the Commissioner (Appeals)'s order and confirming the original authority's decision on duty calculation while eliminating the penalty imposition due to the circumstances of the case.