2007 (2) TMI 535 - AT - Central Excise

Tribunal upholds duty payment ruling against appellants in Rs. 41 lakh case, dismisses challenge on limitation.

KALAIMAGAL ALLOY STEEL PVT. LTD. Versus COMMR. OF C. EX., COIMBATORE

The Tribunal affirmed the Commissioner's decision, holding the appellants liable for duty payment of over Rs. 41 lakhs for the period September 1997 to ... Valuation - Air conditioners - Classification of - Demand - Limitation Issues:The judgment involves issues related to duty demand u/s Rule 96ZP (3) of Central Excise Rules, 1944, challenge against ACP determination, plea of limitation, and liability to pay duty based on ACP.Duty Demand u/s Rule 96ZP (3):The appellants, engaged in manufacturing hot re-rolled products, defaulted in discharging duty liability despite the ACP determined by the Commissioner. The Department issued show-cause notices for duty payment of over Rs. 41 lakhs for the period September 1997 to March 1999, along with proposed penalties. The appellants did not respond to the notices, but their Consultant submitted at the hearing stage that the unit had closed from April 1, 1998. The Consultant also argued for revision of ACP due to lower actual production and furnace type. The Commissioner held the appellants liable for the duty demanded, rejecting the plea of time-bar and ACP revision. The Commissioner referred to a Supreme Court judgment stating that once an assessee opts for Rule 96ZO(3), they cannot claim ACP determination under Section 3A(4) of the Act. The Commissioner confirmed the duty demand but waived interest and penalty based on a Supreme Court order.Challenge Against ACP Determination:The Tribunal noted that the appellants did not challenge the ACP determined by the Commissioner, despite raising grievances related to actual production and furnace type. The Tribunal emphasized that if the appellants were aggrieved by the ACP determination, they should have challenged it before the appropriate appellate forum. As the appellants failed to do so, their liability to pay duty based on the ACP determined by the Commissioner remains valid.Plea of Limitation:Regarding the plea of limitation, the demand was made u/s Rule 96ZP of the Central Excise Rules, 1944, which did not prescribe a specific limitation period. Although Section 11A was mentioned in the show-cause notice, the demand was primarily based on Rule 96ZP. The Tribunal upheld the Commissioner's decision that no part of the demand was time-barred, emphasizing that the appellants could not raise the limitation issue against the duty demand under Rule 96ZP.Liability to Pay Duty Based on ACP:Ultimately, the Tribunal affirmed the Commissioner's order, dismissing the appeal and confirming the duty demand against the appellants. The judgment highlighted the importance of challenging ACP determinations if aggrieved and clarified that the appellants' liability to pay duty based on the ACP determined by the Commissioner was unavoidable.Separate Judgment:No separate judgment was delivered by the judges in this case.