2005 (11) TMI 431 - AT - Central Excise

Tribunal upholds duty demand despite no production, citing finalized assessment

The Tribunal upheld the demand of duty during a period of no production, citing the finalized assessment before the omission of Section 3A of the Central ... Production capacity based duty - Demand Issues:- Demand of duty when no production was made- Applicability of Section 3A of the Central Excise Act, 1944- Finality of assessment before the omission of Section 3AAnalysis:Issue 1: Demand of duty when no production was madeThe appellants, engaged in manufacturing M.S. Ingots, opted to work under Rule 96-ZO(1) requiring a duty payment of Rs. 750/- per M.T. during goods clearance. A demand-cum-show cause notice was issued for duty of Rs. 2,24,159/- during a period of no production, under Rule 9(2) read with Rule 96ZO(1)(c). The adjudicating authority confirmed the demand, penalty, and interest, upheld in appeal. The appellants argued for abatement due to closure, citing late intimations and machine breakdowns, but the authorities did not discuss abatement. The order-in-appeal upheld the demand, penalty, and interest, rejecting the appeal.Issue 2: Applicability of Section 3A of the Central Excise Act, 1944The appellants argued that Section 3A was omitted by the Finance Act, 2001, and thus, the demand cannot be enforced. Citing the case of Air India v. UOI, the appellants contended that once a parent statute is repealed, subordinate legislation does not survive. The learned Advocate relied on the case of M/s. Mitra Steel & Alloys Pvt. Ltd. v CCE, Raigad, for support. However, the JDR highlighted that the assessment was completed before the omission of Section 3A, making the demand enforceable.Issue 3: Finality of assessment before the omission of Section 3AThe Tribunal examined the case records and submissions. The appellants reiterated their arguments based on the case of M/s. Mitra Steel & Alloys Pvt. Ltd. v. CCE, Raigad. The Tribunal noted that the assessment was finalized before the omission of Section 3A and its rules, making the demand valid. Relying on the decision in M/s. Mitra Steel & Alloys Pvt. Ltd. v. CCE, Raigad, the Tribunal rejected the appeal, stating that interfering with finalized assessments would amount to reopening them, which is not warranted.In conclusion, the Tribunal upheld the demand of duty during no production, citing the finalized assessment before the omission of Section 3A, and rejected the appeal based on the arguments presented by both parties.