2014 (12) TMI 1088

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....n the appellants was confirmed assessing their liability under Sub-Rule (3) of Rule 96 ZO of the (then) Central Excise Rules, 1944. Para-3 of the CESTAT order is re-produced below :               3. The contention of the Revenue is that the appellant filed necessary declaration in the year 1997 and also on 1.4.98, in terms of Sub-Rule (3) of Rule 96 ZO of the Central Excise Rules and their duty liability is determined by the Commissioner of Central Excise. The appellant had not opted for the duty determination on actual production under Section 3A(4) of the Central Excise Rules. The contention of the Revenue is that the two letters relied upon by the appellant are not opting ....

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....re-determination of the annual capacity under Section 3A(4) of the Central Excise Act which is not permissible. Further, we find that appellant in the beginning of any financial year had not opted to pay duty under Section 3A (4) of the Central Excise Act. The letters relied upon by the appellant is only asking for re-determination of actual production basis during the same financial year for which appellant opted to pay duty under Rule 96 ZO (3) of the Central Excise Rules. In these circumstances, we find no infirmity in the impugned order whereby the demand of duty is confirmed. However, taking into facts and circumstances of the case, the penalty is reduced to Rs. 50,000/- (Rupees Fifty thousand only). The appeal is disposed of as indica....

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....ts contended that the compounded levy scheme under Rule 96 ZO ibid operated financial year wise and therefore when no option was given by them to opt for the scheme for the financial year 1999-2000, the assessment under Rule 96 ZO was not legal and proper. They also contended that by their various letters they had been protesting that there is much difference between their capacity determination and actual production and that the duty paid by them under Rule 96 ZO should be treated to have been paid under protest. They referred to their letters dated 27.2.1999 and 4.5.1999 wherein they requested for re-determination of the duty liability on actual production basis during the year 1998-1999. They claimed that all these letters clearly showed....

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....rocedure under Rule 96 ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Central Excise Act, 1944 which is specifically excluded. As observed by CESTAT in its order dated 7.10.2005, the Supreme Court in the case of Venus Castings (supra) also held that a manufacturer cannot opt twice during one financial year first choosing to pay in accordance to Sub-Rule (3) of Rule 96 ZO of Central Excise Rules and, thereafter, to switch over to actual production basis under Section 3A (4) of the Central Excise Act. This itself means that the assessee can opt out of the scheme at the end of the financial year. It is matter of record that the assessee never opted out of the compounded levy s....