TaxTMI 
TaxTMI 
2017 (3) TMI 1206
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....ts/respondents Shri R.K. Manjhi, Authorized Representative (DR) - for the Respondent/appellant ORDER Per. B. Ravichandran These are 21 appeals involving identical issues and hence are taken up for disposal together. The Revenue also filed appeals against impugned orders for non-imposition of penalties on the assessee/appellants. 2. The assessee/appellants are registered manufacturers of excisable goods - stainless steel patta/pattis. They have opted for payment of excise duty liability as per the scheme formulated under Notification No. 17/2007-CE dated 01/03/2007. The scheme envisages payment of excise duty based on number of cold rolling machines installed in the factory. The factories of all the assessee/appellants are located in Rajasthan. 3. Rajasthan State Pollution Control Board issued a ban on the operations of factories of assessee/appellants in February, 2013. The power and water supply was also disconnected. The closure of factories were intimated by the assessee/appellants to the jurisdictional central excise officers. The assessee/appellants also dismantled the cold rolling machines installed at their factories and informed the same to the central excise departme....
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.... as deliberate failure to follow the procedure. Para 2 (3) has no application to such situation. When there is no production of excisable goods no central excise duty liability will arise. The duty liability confirmed even when the factory is closed is against the provision of Section 3 of the Central Excise Act, 1944 which states that central excise duty is leviable on goods produced or manufactured in India. When there is no production or manufacture of excisable goods there can be no liability to pay duty ; (d) the Original Authority had rejected the plea of the appellants for invoking the powers as per para 7 of the notification to condone any failure. The provision in the said paragraph clearly states that the JC or Additional Commissioner have power to apply the provision of the notification to a manufacturer who has failed to avail himself the special procedure or to comply with any condition laid down in this notification. The Original Authority simply recorded that no such request had been made to the Jurisdictional AC/DC. The Original Authority, being Commissioner of Central Excise, is well within his powers to examine the request of the appellant and to take a decision....
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....pply for special procedure. - Notwithstanding anything contained in this notification, the Additional Commissioner, or as the case may be, the Joint Commissioner of Central Excise may, at his discretion, for reasons to be recorded in writing, and subject to such conditions as he may deem fit, apply the provisions contained in this notification to a manufacturer who has failed to avail himself of the special procedure, or to comply with any condition laid down in this notification. The assessees/appellants are aggrieved by the confirmation of demand for differential duty for the period March to August 2013. The admitted facts of the case are that during March and April 2013 the Pollution Control Board of Rajasthan Government issued orders for the closure of manufacturing facilities of the appellants. The appellants dismantled the machinery and did not make any excisable goods during these two months. This fact is not disputed. However, the Original Authority held such nonpayment of duty in terms of Notification 17/2003-CE during these two months will amount to failure of the assessee/appellants to avail the special procedure as stated in the said notification. Since such failure w....
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....hing the said order of the Hon'ble High Court. He recorded that the case is not identical to the one decided by the High Court. The legal principle laid down by the Hon'ble Rajasthan High Court in Jupiter Industries (supra) is clearly applicable to the facts of the present case. For two months there is no operation of manufacture or production of excisable goods by the assessee/appellant. Applying the principle as annunciated by the Hon'ble Rajasthan High Court it is apparent that no procedure set out in a notification can over-rule the substantiative charging section in the Act. It is also relevant to note that while on the one side the Commissioner held that the Hon'ble Rajasthan High Court was dealing with a compounded levy scheme under Rule 96 ZB and, hence, cannot be applied to be provision of Notification 17/2007-CE, on the other hand in the same order he relied on the decision of Hon'ble Andhra Pradesh High Court in Sathavahana Steels & Alloys (P) Ltd. vs. Government of India reported in 1999 (14) E.L.T. 787 (AP) which is also on interpretation of same compounded levy scheme under Rule 96ZO and not dealing with the provision of Notification 17/2007-CE. It is apparent that th....
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....nued to follow and discharge duty as per the special scheme. In other words, in case of payment of amount of about Rs. 5 lakhs as duty liability for two months, even though no manufacture happened during that period because of closure, the Revenue could not have taken the plea that there is a failure to follow the special procedure. Such non-payment of around Rs. 5 lakhs resulted in a demand of Rs. 1,32,38,252/- for the six months period, as stated above. We find the whole basis of demand is untenable if looked into in this angle that the assessee /appellant if paid an amount of rupees less than 5 lakhs for nonoperating period he could have been construed to be following the special procedure and huge differential demand would not have arisen. As such, the presumption of the Revenue regarding "failure" of the assessee to follow the special procedure resulting in a differential demand for six months is not legally sustainable. 11. The Original Authority himself recorded that the assessee/ appellant themselves did not cease to work under the special procedure but ceased the work due to disconnection of power supply and sealing of DG set by the electricity department which was beyond....