AI Drafter 
TaxTMI 
TaxTMI 
2017 (12) TMI 225
X X X X Extracts X X X X
X X X X Extracts X X X X
....it Shah, Advocate ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These petitions arise in common background and involve similar facts and legal issues. We may refer to the facts as arising in Special Civil Application No.743/2017. 2. The petitioners are private company and its directors. They have challenged an orderinoriginal dated 26.9.2016 passed by the Commissioner of Central Excise, Surat. By the said order, the Commissioner confirmed the excise duty liabilities of the petitioners for various periods. He however dropped the proposal for interest and penalty on such duty. 3. The petitioners are engaged in manufacturing of manmade fabrics falling under heading No.54.06 of the First Schedule of the Central Exci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o pay the duty on actual production with effect from 20.4.1999. It is not in dispute that such application was never decided by the Commissioner and the petitioners continued to pay the duty on the actual production and clearance of goods. Eventually, section 3A of the Central Excise Act was repealed with effect from 29.2.2001. The scheme and the dispute beyond such period came to an end. We are informed that the writ petition filed by the petitioners and others came to be disposed of as infructuous. 5. In the meantime, the excise authorities had issued six different show cause notices ranging from 2.8.1999 to 29.8.2001 covering various periods ranging from February 1999 to February 2001 during which, according to the authorities, the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er determined. The petitioners were allowed to make such applications by the High Court. Such applications remained undecided all through out. The Commissioner therefore, committed a serious error in confirming the duty. Counsel drew our attention to subsection( 4) of section 3A of the Central Excise Act to contend that the manufacturer covered under the scheme of section 3A enjoys an option either to pay duty on the annual production capacity or on actual production basis after applying to the Commissioner. There was no finality of such an option and could be changed by the manufacturer. In this respect, reliance is placed on the decision of Supreme Court in case of Bhuwalka Steel Industries Ltd. v. Union of India reported in 2017 (348) E.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l gazette. Under subsection( 4) of section 3A, however where an assessee claims that the actual production of notified goods in his factory is lower than the production determined under subsection( 2), the Commissioner of Central Excise would after giving an opportunity to the assessee to produce evidence in support of his claim, 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 subsection( 3). 10. It can thus be seen that under subsection( 4) of section 3A, the manufacturer could apply to the Commissioner and request that the duty may be levied on actual production instead of annual production capacity. It was in this context that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee to continue the availment of concessional rate of duty for the next month on a quantum of production which he is unable to achieve. It was observed as under : "47. After availing the scheme for a month by paying the duty in advance, if the assessee ends up in a situation of not being able to produce the quantum of goods equivalent to 1/12 of his ACP, we no reason which compels the assessee to continue the availment of concessional rate of duty (for the next month) on a quantum of production which he is unable to achieve. In our opinion the assessee must have an option to make the payment of duty in accordance with Rule 96ZP(1) at a higher rate but on the actual production. For those assessees who chose to pay the duty ....