2019 (5) TMI 808 - AT - Central Excise

Appellate Tribunal overturns decision to set aside Central Excise duty, interest, and penalty.

Commissioner of C.E., Chandigarh Versus M/s Atul Castings Ltd

The Appellate Tribunal allowed the Revenue's appeal, overturning the Commissioner (Appeals)' decision to set aside duty, interest, and penalty imposed on ... Compounding of duty - sub-rule (3) of Rule 96ZO of the Central Excise Rules, 1944 - HELD THAT:- It is seen that at the time of adjudication before the Additional Commissioner, it has never contended by the respondent-assessees that they have opted out the scheme provided under Rule 96ZO(3)(i) from 01.04.1998. The main argument taken by the respondent-assessees at the time of original adjudication was that they have filed an abatement claim for the period in dispute of the duty amounting to ₹ 23,50,000/- which was pending for consideration before the Commissioner of Central Excise, Chandigarh; and therefore the demand of duty need to be reduced by this amount. It has also been admitted by the respondent-assessees that the amount of claimed abatement is reduced from the total amount, the only duty payable by them comes to ₹ 44,00,000/-. After perusal of the order of learned Commissioner (Appeals), it is noticed that while deciding the matter, he has relied on the certain facts, which were actually not present before the Original Adjudicating Authority nor they have contended/presented before the Original Adjudicating Authority by the respondent-assessee. The Order-in-Appeal is devoid of any merits - appeal allowed - decided in favor of Revenue. Issues:- Alleged non-payment of Central Excise duty under the compounding duty scheme- Imposition of interest and penalty provisions- Adjudication by Additional Commissioner confirming duty, interest, and penalty- Appeal to Commissioner (Appeals) setting aside duty, interest, and penalty- Revenue's appeal against the Order-in-AppealAnalysis:1. The respondent-assessees were accused of not paying Central Excise duty under the compounding duty scheme for manufacturing non-alloy steel ingots/billets. Five show cause notices were issued demanding a total of Rs. 65,00,000 in duty, with interest and penalties imposed as well.2. The matter was adjudicated by the Additional Commissioner, who confirmed the duty, interest, and penalty. However, the Commissioner (Appeals) later allowed the appeal of the respondent-assessees, setting aside the duty, interest, and penalty.3. The Revenue appealed the decision of the Commissioner (Appeals) before the Appellate Tribunal. Despite the absence of the respondent-assessees during the proceedings, the Tribunal heard the Departmental Representative's argument. It was contended that the Commissioner (Appeals) wrongly relied on a letter to grant the respondent-assessees the benefit of opting out of the compounding duty scheme.4. The Department argued that the respondent-assessees never opted out of the scheme, citing relevant court cases. They claimed that the Commissioner (Appeals) erred in dropping the demand based on grounds not presented before the Original Adjudicating Authority.5. The Tribunal noted that during the original adjudication, the respondent-assessees did not claim to have opted out of the scheme. Their main argument was a pending abatement claim, reducing the duty amount. The Tribunal found that the duty payable after adjusting the claimed abatement was Rs. 44,00,000, not Rs. 65,00,000 as confirmed by the Original Adjudicating Authority.6. The Tribunal observed that the Commissioner (Appeals) relied on facts not presented before the Original Adjudicating Authority, leading to the decision being devoid of merits. Consequently, the Tribunal set aside the Order-in-Appeal, allowing the Revenue's appeal and reinstating the duty, interest, and penalty.This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the key arguments and decisions made throughout the process.