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of <h1>Tribunal orders duty adjustment for excess payments in cotton fabric duty dispute</h1> <h3>STANDARD NIWAR MILLS Versus COMMISSIONER OF C. EX., KANPUR</h3> STANDARD NIWAR MILLS Versus COMMISSIONER OF C. EX., KANPUR - 2015 (329) E.L.T. 514 (Tri. - Del.) Issues:1. Dispute regarding payment of duty under compounded levy scheme.2. Show cause notice for withdrawal of compounded levy scheme.3. Imposition of duty based on actual clearances.4. Modvat credit and cum duty benefit.5. Adjustment of excess duty paid against duty liability.Analysis:1. The appellant, a manufacturer of processed cotton fabrics, faced a dispute regarding the payment of duty under the compounded levy scheme for the period from January 1999 to June 1999. The Commissioner initially fixed their monthly duty liability at Rs. 4,00,000 per month under the scheme. However, a show cause notice was issued in August 1999 to withdraw the scheme and charge duty based on actual clearances.2. The Commissioner, through an order-in-original dated 7-6-2000, withdrew the compounded levy scheme, leading to a differential duty demand of Rs. 43,25,593 for the disputed period and imposed a penalty of Rs. 1,00,000. The Tribunal, in an earlier order, remanded the matter to the Commissioner for re-quantification of duty, emphasizing that denial of the compounded levy scheme entitled the assessee to Modvat credit.3. Subsequent rounds of adjudication followed, with the Tribunal directing the Commissioner to allow cum duty benefit. In the final adjudication order dated 29-10-2004, the Commissioner permitted the cum duty benefit and adjusted a portion of the excess payment made by the appellant. However, the issue of adjusting excess duty paid during July 1999 to November 1999 against the duty liability for January 1999 to June 1999 remained unresolved.4. The Tribunal, after considering submissions from both sides, found that if the duty paid under the compounded levy scheme exceeded the duty liability based on actual clearances during July 1999 to November 1999, the excess payment should be adjusted against the duty liability for the earlier period. Consequently, the matter was remanded to the Commissioner for re-quantification of the duty demand based on this adjustment.This detailed analysis highlights the progression of the dispute, including the withdrawal of the compounded levy scheme, the subsequent re-quantification of duty demands, and the issue of adjusting excess payments against earlier duty liabilities.
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