TaxTMI 
TaxTMI 
2012 (2) TMI 441
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....l Capacity, determined under Rule 96ZP(3) of Central Excise Rules, 1944, of the Appellants in their factory. They had opted for payment of duty under such Scheme. The Commissioner of Central Excise, Lucknow vide different orders for different periods decided under Rule 96ZP(3) the duty liability to be discharged by the Appellants as Rs. 1,84,830/- per month for the period 1-9-1997 to 28-11-1997 and Rs. 70,075/- per month from 29-11-1997 onwards. 2. The Appellants did not pay such duty but for a payment of Rs. 6,000/- stated to be paid as per annexure to Show Cause Notice issued for December, 1997 and Jan. 1998. So five Show Cause Notices were issued demanding the short paid duty and proposing imposition of penalty and interest at 18....
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.... 5. Aggrieved Excise Rules, 1944 which is reproduced below :- "3A. Power of Central Government to change Excise duty on the basis of capacity of production in respect of notified goods. - (1) Notwithstanding anything contained in Section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance ....
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....aim, determine the actual production and redetermine the amount of duty payable by the assessee with reference to such actual production at the rate specified in sub-section (3)." 9. It may be noticed that if a manufacturer claims abatement for not working during a short period as provided in Section 3A(3) conditions prescribed have to be followed. Such conditions involve giving advance intimation taking meter reading for electricity supply etc. to make sure that the manufacturer does not actually do manufacturing activity during such period. However there are no such conditions prescribed in sub-section (2). Apparently the appellant has tried to take benefit of this loop-hole by just sending intimation that they were surrendering t....
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....;As may be seen the adjudicating authority accepted that the factory was closed during Sep. 1997 and Oct. 1997 and also in March, 1998. The First Appellate authority has not accepted that the factory was closed during the period because intimations regarding last reading for electricity supply was not intimated and has confirmed duty liability for the entire period of Sep. 1997 to March, 1998. The Commissioner (Appeals) has accepted the contention of Revenue that the request for surrender of registration was an eye-wash and they were actually producing goods during the entire period. 13. The entire dispute is result of a weakness in the provisions of Section 3A(2) of the Central Excise Act inasmuch as the procedure prescribed under ....