2016 (3) TMI 483 - AT - Central Excise

Tribunal modifies duty liability rule for 1999-2000

The Tribunal allowed the Revenue's appeal and modified the duty liability determination for 1999-2000 under Rule 96ZP(3) instead of Rule 96ZP(1), ... Commissioner determining duty liability for the period 1999-2000 under Rule 97ZP(1) with liability for period 1997-98 and 1998-99 was determined under Rule 96ZP(3) - Held that:- The appellant had given the notice about closure to the factory but in that notice dated 01.06.1998 intimating about closure of the mill from 30.05.1998 there was no mention about opting out of the provision of Rule 96ZP(3). Hon’ble Supreme Court in the case of Venus Castings (P) Ltd. (2000 (4) TMI 37 - SUPREME COURT OF INDIA ) and Supreme Steels and General Mills (2001 (10) TMI 90 - SUPREME COURT OF INDIA ) has in effect held that the manufacturer cannot opt twice during one financial year and the opting out of Rule 96ZP(3) would be applicable from the beginning of the next financial year. As find Revenue's contention that the Commissioner was not right in extending the provisions of Rule 96ZP(1) for the period 1999-2000 when there was no such request from the respondent to opt out of scheme under Rule 96ZP(3) sustainable. Notice of closure cannot be read to be an option to opt out of Rule 96ZP(3). Incidentally in the wake of the Finance (No.2) Act, 2009 (by virtue of section 111 thereof) (The Hon’ble High Court of Uttarakhand in the case of Kukreti Steels Ltd. Vs. CCE Meerut-1 - 2015 (9) TMI 205 - UTTARAKHAND HIGH COURT ) held that there is no dispute that Rule 96ZO was introduced / enacted vide notification NO. G.S.R. 448(E), dated 1st August 1997. Perusal of sub-section (3) of Section 111 of Finance (No.2) Act, 2009 would reveal that any action taken or anything done on purported to have been taken or done at any time during the period of commencement on or from 1st August 1997 and ending with the day the Finance (no.2) Bill, 2009 receives the assent of the President shall be deemed to be and to have always been for all purposes, as validly and effectively taken or done as if the amendments made by sub-section (1) had been in force at all material times and notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or other authority. Thus allow the Revenue's appeal in as much as the impugned order is modified to the extent that the duty liability for the period 1999-2000 is ordered to be fixed under the said Rule 96ZP(3). Issues Involved:- Determination of duty liability under different rules for different periodsAnalysis:The case involved a dispute regarding the determination of duty liability for different periods under different rules. The respondent, engaged in manufacturing hot rolled products of non-alloy steel, opted to work under Rule 96ZP(3) of the Central Excise Rules. The Commissioner provisionally determined the annual capacity and fixed duty liability based on this rule. Subsequently, the respondent intimated about changes in production capacity and closure of the mill. The Commissioner then finalized duty liabilities for different years under different rules. The Revenue contended that the duty liability for 1999-2000 was incorrectly determined under Rule 96ZP(1) instead of Rule 96ZP(3) due to the closure of the mill. The Revenue argued that the respondent did not formally opt out of Rule 96ZP(3, and thus, the duty liability should be determined under the same rule. The Tribunal referred to previous Supreme Court judgments, emphasizing that a manufacturer cannot opt out of a scheme twice in the same financial year. The Tribunal agreed with the Revenue's contention, stating that the closure notice did not constitute opting out of Rule 96ZP(3). Additionally, the Tribunal cited relevant legislation to support its decision. Consequently, the Tribunal allowed the Revenue's appeal and modified the order to fix the duty liability for 1999-2000 under Rule 96ZP(3).This detailed analysis highlights the key aspects of the case, including the initial scheme opted by the respondent, changes in production capacity, closure of the mill, and the legal interpretation of rules governing duty liability determination. The Tribunal's decision was based on legal principles, precedents, and the specific circumstances of the case, ensuring a comprehensive understanding of the judgment.