Special excise procedure for cold rolling machines fixes duty by installed machines, not later claims of hot rolling use.

Section 3A of the Central Excise Act, 1944, read with Rules 96ZA to 96ZC of the Central Excise Rules, 1944, provides a special duty scheme for cold rolling machines based on the number of machines installed by a manufacturer opting for that procedure. Duty is computed with reference to the maximum number installed, and any change in installed machines must be intimated under Rule 96ZC. A machine earlier declared as a cold rolling machine cannot be excluded from levy merely because the assessee later claimed it was used for hot rolling. Circulars issued for Rules 96ZO and 96ZP do not govern this scheme.

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Issues: Whether, under the special procedure for cold rolling machines, excise duty was payable on the basis of the maximum number of cold rolling machines installed, irrespective of the actual use of one machine for hot rolling.

Analysis: Section 3A of the Central Excise Act, 1944 and the special provisions in Rule 96ZA and Rule 96ZB of the Central Excise Rules, 1944 create a scheme of levy based on the number of cold rolling machines installed by a manufacturer who opts for the special procedure. Under this scheme, the duty is computed with reference to the maximum number of such machines installed, and the manufacturer is required to intimate changes in the number of installed machines under Rule 96ZC. Once the assessee had declared the machine as a cold rolling machine and had availed the special procedure, its later contention that the same machine was used only for hot rolling did not alter the duty liability. The circulars relied upon, issued in the context of Rules 96ZO and 96ZP, did not apply to the scheme under Rule 96ZA and Rule 96ZB.

Conclusion: Duty was correctly levied on two machines, and the assessee was not entitled to treat the earlier declared cold rolling machine as outside the levy merely because it was allegedly used for hot rolling.

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