2002 (1) TMI 214 - AT - Central Excise

Tribunal Allows Appeals, Setting Aside Commissioner's Orders

The Tribunal allowed the appellants' appeals, setting aside the Commissioner's orders directing duty payment under Rule 96ZO(3) instead of Section 3A(4) ... Production capacity based duty - Determination of Issues involved: Determination of annual production capacity for induction furnace units, duty payment under compound levy scheme vs. actual production basis, acceptance of appellants' option to pay duty under Section 3A(4) of the Act.Analysis:1. The appellants were engaged in manufacturing non-alloy steel ingots/billets chargeable to duty under Section 3A of the Central Excise Act. The Commissioner determined their annual production capacity under Notification No. 24/97-C.E. (N.T.) based on their options for discharging duty liability on a lump sum basis. However, the appellants later opted to pay duty under Section 3A(4) instead of Rule 96ZO(3) following a decision of the Apex Court. The Commissioner, despite the appellants' choice, directed them to discharge duty under Rule 96ZO(3) of the Rules.2. The appellants contended that they had the right to opt out of the compound levy scheme as per the Apex Court's decision and should pay duty under Section 3A(4) based on actual production. The learned Counsel argued that the Commissioner wrongly imposed duty under Rule 96ZO(3) and requested setting aside the impugned orders for re-determination of duty liability from the date of opting for actual production basis.3. The learned SDR acknowledged that the appellants could opt out of the compound levy scheme per the Apex Court's judgment and that their options needed consideration in light of that decision. The appellants had initially agreed to pay duty under the compound levy scheme but later exercised their option for payment based on actual production.4. The Tribunal noted that the appellants' options to pay duty on actual production basis were legally exercised in accordance with the Apex Court's ruling. The Commissioner should have determined their duty liability accordingly. Therefore, the impugned orders contravened the Apex Court's judgment and were set aside, with the matter remanded for re-determination of duty liability under Section 3A(4) of the Act.5. The Tribunal directed the adjudicating authority to consider the dates of options exercised by each appellant for paying duty on actual production and ensure compliance with the law established by the Apex Court. The appellants' appeals were allowed by way of remand, affording them an opportunity for a hearing before the final order is passed.