TaxTMI 
TaxTMI 
2024 (9) TMI 614
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....at they had to stop the production due to non receipt of revised consent order from Gujarat Pollution Control Board which is beyond their control, during that period duty should be abated. However, show cause notice dated 31.08.2015 was issued by the Assistant Commissioner, Central Excise Division-I Ahmedabad-II whereby, the demand of Rs.2,40,000/- was proposed along with the proposal of demand of interest and imposition of penalty. The said show cause notice has been adjudicated vide order in original dated 14.12.2016 whereby, the demand was confirmed on the ground that the appellant's factory was not remained closed for more than 3 months. Being aggrieved by the said order in original, appellant filed the appeal before Commissioner (Appeals)who consenting with the Adjudicating Authority up held the order in original and rejected the appeal. Therefore, present appeal is filed by appellant. 2. Shri M. K. Kothari, Learned Consultant appearing on behalf of the appellant submits that even though, the factory did not remain close for more than 3 months, but it was closed for 2 months, the closure of the factory is not as per the wish of the appellant but due to the circumstances which....
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....sioner or the Deputy Commissioner of Central Excise, as the case may be, be precluded from availing himself of such procedure for a period of six months from the date of such failure. 7. Power to condone failure to apply 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 h....
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....rovision. The Hon'ble High Court held that when there is an undisputed fact of no production during the material period no duty liability can be fixed on the assessee. We note that the Original Authority fell in error in distinguishing 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 overrule the substantive 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 96ZB and, hence, cannot be applied to be provision of Notification No. 17/2007-C.E., 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)....
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....sulted in a demand of Rs. 1,32,38,252/-. If the assessee/appellant paid the said Rs. 2,47,200/- for each month during March and April, 2013 also then the whole demand will become unsustainable on the simple premise that the assessee/appellant continued 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 Or....