2006 (3) TMI 605 - AT - Central Excise

Tribunal overturns duty order, allows payment based on actual production, citing legal precedents.

The Tribunal allowed the appeal, setting aside the Commissioner's order and permitting duty payment based on actual production. The Tribunal emphasized ... Production capacity based duty Issues: Appeal against Order of Commissioner of Customs & Central Excise regarding payment of duty on actual production basis, relevance of BIFR proceedings, reliance on Apex Court decision, compliance with Tribunal's directives.Analysis:1. The appeal was filed against an order passed by the Commissioner of Customs & Central Excise regarding the payment of duty on actual production basis. The Tribunal noted that this issue had already come before them twice. The Tribunal observed that in the previous orders, the adjudicating authority had not examined the evidence produced by the party with reference to the Board for Industrial and Financial Reconstruction (BIFR). The Tribunal emphasized that the party sought duty payment based on actual production, as per the decision of the Hon'ble Andhra Pradesh High Court in a specific case. Despite previous directions, the adjudicating authority did not follow the Tribunal's observations and re-determined the capacity, disregarding the relevance of BIFR proceedings.2. The appellant's representative argued that the adjudicating authority wrongly relied on a Supreme Court decision regarding payment options for duty, as the appellant had consistently opted for duty payment based on actual production due to their BIFR proceedings. The representative cited relevant case laws to support the appellant's position. The Tribunal agreed with the appellant, stating that the adjudicating authority had ignored their directives and the decision of the Andhra Pradesh High Court. The Tribunal found no merit in the impugned order and set it aside, allowing the appellant to pay duty based on actual production.3. Upon careful review of the case records, the Tribunal noted that the appellant had informed the Department about the sickness of their unit and had requested payment based on actual production. The unit had been closed during a specific period for which duty payment was in question. The Tribunal reiterated that, in line with the Andhra Pradesh High Court decision, the adjudicating authority should have permitted duty payment based on actual production for that period. Since the authority had disregarded the Tribunal's directives, the impugned order was deemed to have no merit. Consequently, the Tribunal allowed the appeal, directing that the appellant be permitted to pay duty based on actual production.In conclusion, the Tribunal found in favor of the appellant, setting aside the Commissioner's order and allowing duty payment based on actual production, as per the appellant's consistent request and relevant legal precedents.