TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 906
X X X X Extracts X X X X
X X X X Extracts X X X X
....ued subsequent show-cause notices for the period 04.1998 to 03.1999 demanding a total duty of Rs. 9,10,396/-. All these show-cause notices were adjudicated by Order No.3/2001 dt.31.1.2001 by Dy. Commissioner of Central Excise, Gulbarga, confirming demand of duty of Rs. 14,24,116/- and imposing equal penalty under Rule 96ZP(3) and a penalty of Rs. 10,000/- under Rule 173Q. Commissioner (A) has upheld the order of the Dy. Commissioner on appeal filed by the appellants. The original appeal filed by the appellants came to be dismissed by this Bench for non-compliance vide Final Order No.1356/2004 dated 9.8.2004. An appeal filed the appellants in High Court of Karnataka has restored the appeal and the appeal was restored vide Tribunal's Order in No. E/ROA/53/2006 dated 12.6.2006. Hence, this appeal. 2. The appellant's contended that their factory was under closure from 1.2.1998 to 22.3.1998 and 1.5.1998 to till date. They have informed the Department duly vide letters dated 30.1.1998, 1.5.1998, 13.5.1998, 16.7.1998 and 1.4.1999 explaining therein the reasons for the shutdown. The Learned Dy. Commissioner confirmed the demand solely on the ratio of the Hon'ble Supreme Court in the case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the original authority has recorded that it is not disputed that the assessee is operating under Rule 96ZP(3) between 9/1997 to 3/1999. However, we find that the original authority has not given any findings as to how such a conclusion was drawn. Further, the authority has recorded that Commissioner of Central Excise, Belgaum, the proper officer to grant abatement, has also rejected the assessee's claim as they are following the procedure under Rule 96ZP(3). 5.1 To have a proper appreciation of the issue, it is useful to go through the text of the provisions, which are reproduced below: "Section 3A. Determination of annual capacity of production of the factory for levy of Excise duty. - (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 d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oses of Section 3 of the Customs Tariff Act, 1975 (51 of 1975), the duty of excise leviable on the notified goods shall be deemed to be the duty of excise leviable on such goods under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), read with any notification for the time being in force. Explanation 2. - For the purposes of this section the expressions "free trade zone" and "hundred per cent export-oriented undertaking" shall have the meanings assigned to them in section 3." Rule 96ZP introduced by Notification No.33/1997 is reproduced herein below: 96ZP. Procedure to be followed by the manufacturer of hot re-rolled products. - (1) A manufacturer of non-alloy steel hot re-rolled products falling under sub-heading Nos. 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), shall debit an amount calculated at the rate of Rs. 400/- per metric tonne at the time of clearance of hot re-rolled products of non-alloy steel from his factory in the account-current maintained by him under sub-rule (1) of rule 173G of the Central Excise Rules, 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....non-alloy steel during any continuous period of not less than seven days and wishes to claim abatement under sub-section (3) of section 3A of the Central Excise Act, 1944, the abatement will be allowed by an order passed by the Commissioner of Central Excise of such amount as may be specified in such order, subject to the fulfilment of the following conditions, namely :- (a) the manufacturer shall inform in writing about the closure to the Assistant Commissioner of Central Excise, with a copy to the Superintendent of Central Excise, either prior to the date of closure or on the date of closure; (b) the manufacturer shall intimate the reading of the electricity meter to the Assistant Commissioner of Central Excise, with a copy to the Superintendent of Central Excise, immediately after the production in his factory is stopped along with the closing balance of stock of the hot re-rolled products of non-alloy steel; (c) the manufacturer, when he starts production again, shall inform in writing about the starting of production to the Assistant Commissioner of Central Excise, with a copy to the Superintendent of Central Excise, either prior to the date of starting production or on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se may be, he shall be liable to pay the outstanding amount along with interest thereon at the rate of eighteen per cent. per annum, calculated for the period from the 1st day of September, 1997 or the tenth of the month, as the case may be, till the date the actual payment of the whole of the outstanding amount : Provided also that where a manufacturer has paid the amount during any month on the basis of provisional determination of annual capacity and subsequently the annual capacity is determined on final basis, the manufacturer shall pay the whole of the differential amount recoverable for the relevant months by the tenth of the month succeeding the month in which the annual capacity is determined on final basis. (4) In case a manufacturer wishes to avail of discharging his duty liability in terms of sub-rule (3), he shall inform the Commissioner of Central Excise, with a copy to the Assistant Commissioner of Central Excise, in the following proforma : "We _________ (name of the factory), located at _________ (address) hereby wish to avail of the scheme described in sub-rule (3) of rule 96ZP, for full and final discharge of our duty liability for the manufacture of hot re-ro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount of duty payable by the assessee with reference to such actual production at the rate specified under Section 3". Obviously, the determination of amount of duty payable by the assessee is not a one-time affair. Such a determination is to be made periodically. Therefore, the opportunity of placing evidence for the establishment of actual production for a period relevant for the assessment must be available to the assessee from time-to-time. 44. Whether such a statutory right is in any way curtailed by Rule 96ZP(3) of the Rules of 1944 is required to be examined. Rule 96ZP(3) is relevant in the context of the assessment of duty for those assessees who choose to opt for the payment of the excise duty on a monthly basis. The duty payable by such assessees would be Rs. 300 x ACP in metric tonnes. Rule 96ZP(3) stipulates that an assessee seeking to avail the scheme (concessional rate of duty) under Rule 96ZP(3) is required to make application in the prescribed format. The Rule is silent about the point of time at which such an application is required to be made. But sub-rule (3) stipulates the time within which the duty is required to be paid, i.e., in the "beginning of each month"....