2023 (4) TMI 708 - AT - Central Excise

Tribunal confirms duty payment for non-notified goods under Central Excise Act

Commissioner of Central Excise, Kolkata-II Versus M/s. Beekay Steel Industries Limited

The Tribunal upheld the Commissioner's decision, confirming that the assessee correctly paid duty under Section 3 of the Central Excise Act, 1944 for ... Excess utilization of the MODVAT Credit in respect of bars and rods manufactured by the Appellant which are used for construction purposes - Section 3 or Section 3A of the Central Excise Act, 1944 - HELD THAT:- The Ld. Commissioner in the de novo order has given detailed findings - It was held by the Ld Commissioner that the assessee complied with the order of the Commissioner of Central excise, Kolkata-II Commissionerate and acted on that basis and no duty was intentionally paid excess and passed on to the buyers by the assessee in as much as the modvat credit was available to the buyers when duty was paid by the assessee correctly under the provisions of Section 3 of Central excise Act, 1944 and hence I hold the charges framed against the assessee not sustainable. The Commissioner’s permission dated 23.09.1997 and 20.04.1998 was neither withdrawn nor challenged before the higher appellate forum. Inasmuch as the Commissioner vide his order dated 23.09.1997 and 20.04.1998 allowed the Respondents to work under the provisions of Section 3 w.e.f. Financial Year 1997-98 and the Respondent had discharged the duty burden under the said provisions availing MODVAT Credit. There are no infirmity in the order passed by the Ld. Commissioner - appeal of Revenue dismissed. Issues Involved:1. Determination of whether the assessee was required to pay duty under Section 3 or Section 3A of the Central Excise Act, 1944.2. Validity and review of permission to pay duty under Section 3.3. Examination of excess utilization of MODVAT Credit.4. Applicability of Section 3 of the Central Excise Act, 1944 in cases of predominance of non-notified items.Detailed Analysis:Issue 1: Duty Payment under Section 3 or Section 3AThe primary issue was to determine whether the assessee was required to pay duty under Section 3 or Section 3A of the Central Excise Act, 1944 during the material period. This required an analysis of the predominance of specified and non-specified items manufactured by the assessee. The Tribunal had previously remanded the matter to the original authority to examine this aspect without reference to the quantum of production of specified and non-specified goods. The de novo order by the Commissioner concluded that the assessee was permitted to continue paying duty under Section 3, as they were manufacturing predominantly non-notified goods, and this decision was not reviewed or appealed against.Issue 2: Validity and Review of Permission to Pay Duty under Section 3The second issue was whether the permission to pay duty under Section 3 was correctly given and if it was reviewed later. The Commissioner of Central Excise, via letters dated 23.09.1997 and 20.04.1998, allowed the assessee to pay duty under Section 3, subject to review at the end of the financial year. However, no review or appeal was conducted against these permissions. The Commissioner found that the assessee complied with the order, and there was no intentional excess payment of duty passed on to the buyers.Issue 3: Examination of Excess Utilization of MODVAT CreditThe third issue was to examine whether there had been any excess utilization of MODVAT Credit in respect of rods and bars manufactured by the assessee. The Commissioner observed that the buyers of the goods could avail MODVAT Credit in respect of the full duty paid by the assessee under Section 3, thus negating any excess utilization. The original adjudicating Commissioner noted that the demand of Rs.79,14,998/- was based on an alleged 'loss of revenue' due to the method of duty payment, but this did not constitute a short levy or erroneous refund.Issue 4: Applicability of Section 3 in Cases of Predominance of Non-notified ItemsThe Commissioner further noted that the question of law regarding the applicability of Section 3 in cases of predominance of non-notified items was settled by the Tribunal in previous cases. The Commissioner concluded that the assessee predominantly produced non-notified goods and was thus correctly permitted to pay duty under Section 3.Conclusion:The Tribunal upheld the Commissioner's findings, stating that the assessee had complied with the Commissioner's order and correctly paid the duty under Section 3. The Tribunal found no infirmity in the Commissioner's order and rejected the Revenue's appeal. The cross-objection was also disposed of. The operative part of the order was pronounced in the open Court.