2009 (6) TMI 994 - AT - Central Excise

Steel Rolling Mill's Appeal Granted, Annual Production Capacity Recalculation Ordered

The Tribunal allowed the appeal of a steel Rolling Mill under Chapter 72 of CETA, 1985, remanding the matter to the Commissioner for recalculating Annual ... Production capacity based duty Issues:1. Applicability of Compounded Levy Scheme under Rule 96ZP of the CER, 1944 to a steel Rolling Mill.2. Dispute regarding assessment based on actual production versus Annual Production Capacity (APC) determination.3. Legal implications of Supreme Court and High Court orders on duty assessment.4. Commissioner's decision on APC fixation and subsequent demands.5. Interpretation of Section 3A and relevant legal precedents.6. Consideration of appellant's submissions and departmental observations.7. Decision on APC fixation and duty liability based on actual production.Analysis:1. The appellant, a steel Rolling Mill, falls under Chapter 72 of CETA, 1985 and was part of the Compounded Levy Scheme under Rule 96ZP. The dispute arose due to conflicting orders from the Hon'ble Delhi High Court, Supreme Court, and Gujarat High Court regarding the assessment of duty based on actual production versus the APC determined by the Revenue.2. The appellant contended that post-Supreme Court directions, duty should be assessed on actual production, not APC. The absence of a saving clause in Section 3A and Rule 96ZP was highlighted to argue that pending cases should lapse. The appellant consistently sought duty payment based on actual production, citing legal precedents and challenging the Commissioner's orders fixing APC for multiple years.3. The legal battle involved the appellant's applications for actual production assessment, the Revenue's insistence on APC-based duty demands, and the High Court's directive for the Commissioner to decide on the matter. The Tribunal considered the Supreme Court's final decision and the appellant's right to APC fixation based on actual production, leading to a remand to the Commissioner for recalculating duty.4. The Commissioner's observations on the appellant's declarations, APC fixation, and duty confirmation based on APC were scrutinized. The Tribunal acknowledged the appellant's submissions, the evolving legal landscape post-Supreme Court judgment, and the need to rectify duty assessment discrepancies arising from APC fixation.5. The Tribunal analyzed the legal arguments regarding Section 3A's deletion, the impact on APC fixation, and the appellant's entitlement to duty assessment based on actual production. The interplay of legal principles, precedents, and court orders shaped the Tribunal's decision to uphold the appellant's claim for APC fixation on actual production basis.6. The appellant's contentions, the department's stance, and the Commissioner's findings were carefully examined. The Tribunal noted discrepancies in APC determination, the appellant's consistent requests for actual production assessment, and the legal obligations post-Supreme Court ruling, leading to a favorable decision for the appellant.7. Ultimately, the Tribunal allowed the appeal, remanding the matter to the Commissioner for recalculating APC based on actual production from a specified date. The decision emphasized the appellant's right to accurate duty assessment, the legal implications of court orders, and the need to rectify duty demands based on APC discrepancies.This detailed analysis covers the key issues, legal arguments, court orders, and the Tribunal's decision in the case before the Appellate Tribunal CESTAT, AHMEDABAD.