TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1777
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....llant from September, 1997 to March, 1998 was allegedly Rs. 42,00,000/- which had to be paid on or before March 31, 1998 but the assessee had paid only Rs. 14,54,996/- and thus paid less by Rs. 27,45,204/-. The appellant was asked to show cause as to why the said duty of Rs. 27,45,204/- together with interest @ 18% be not realized from the appellant. The appellant filed a reply dated June 21, 1998 to the said notice dated May 28, 1998 drawing the attention of the jurisdictional Assistant Commissioner of Central Excise to the fact that Central Excise duty was being paid by the appellant @Rs. 750/- per MT under Rule 96ZO(1) of the said Rules 'under protest'. It was stated that the liability of paying duty under Section 3A of the Act was sub-judice before Hon'ble Supreme Court and the Hon'ble Supreme Court had directed to file application on the basis of actual production by assessees which had to be considered by the Department and until then no coercive action was to be taken by the Department. A copy of the said letter dated 21.06.1998 was also filed. No further proceeding was continued thereafter by the Department on this show cause notice. 2. The appellant, thereafter, by a le....
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.... the Commissioner by the appellant in respect of re-rolled products, it was required to pay duty @ Rs. 300/- per MT multiplied by the annual capacity determined, according to which the amount of duty came to Rs. 50,13,229.20 but the appellant had paid only Rs. 12,21,317/-. The appellant was therefore, called upon the show cause to the Commissioner of Central Excise, Jamshedpur as to why the alleged outstanding amount of Rs. 37,91,912/- together with interest @ 18% until the date of actual payment, should not be demanded from the appellant and why penalty should not be imposed upon the appellant. 5. In the meanwhile, there was change in the jurisdictional Commissioner and the appellant's all three cases were transferred to the Commissioner (Adjudication), Central Excise & Service Tax, Ranchi. Thereafter, a common personal hearing was granted to the appellant relating to all the three show cause notices on January 13, 2006 by the Commissioner (Adjn) Central & Service Tax, Ranchi. Vide the common impugned order, the Commissioner confirmed the demands alongwith interest and also imposed penalties. Being aggrieved whereby the instant appeal has been preferred. 6. The Ld Senior Cou....
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....r letter dated 15.07.1999, the appellant had specifically stated that it was paying duty on the basis of Annual Capacity of Production determined by the Assistant Commissioner 'under protest'. It is thus evident that the only option exercised by the appellant in the instant case all along was that the determination of duty liability should be made on the basis of actual production made. There is no evidence to the contrary and none has been disclosed in either the show cause notices or in the impugned order. 6.6 In fact it is acknowledged in the impugned order, in the 'DISCUSSION & FINDINGS' part thereof, that the option exercised was as aforesaid of actual production basis by the appellant, relying upon interim orders passed by the Hon'ble Supreme Court in the case of Venus Castings (P) Ltd. and by the Hon'ble Patna High Court in the case of the appellant.. 6.7 It is submitted that letters of the appellant tantamounted to exercising of option by the appellant. In the premises, the Commissioner should have appreciated and erred in not doing so that in terms of the decisions of the Hon'ble Supreme Court in the case of Commissioner of C.Ex & Custom Vs. Venus Castings (P) Ltd. a....
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....ys that the appeal may be dismissed. 9. Heard both the side and perused the appeal papers. The written submissions along with annexed documents submitted by the appellant was taken into consideration. 10. We have gone through the relevant letters from the Revenue and the appellant with regard to fixation of the Annual capacity. They are reproduced below : 11. From the above documents, we find that in terms of Section 3A of the CEA 1944, initially on 23.09.1997, the annual capacity of production of the Induction Furnace, @ 9600 MT was fixed on provisional basis. Subsequently, the Commissioner, vide Order dated 25.03.1998, finally determined the annual capacity of production of the Induction Furnace, @ 9600 MT. The appellant, vide their letter dated 21.06.1998, submitted that they were paying the Excise Duty 'Under Protest' towards the Annual Production Capacity determined provisionally in September 1997. They also drew the attention towards the issue pending before the Hon'ble Supreme Court and the direction of the Apex Court to the Revenue to allow the manufacturer to pay the Excise Duty based on the actual production. The appellant's letter clarifies that they did not acc....
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....able under sub-rule 3 of Rule 96ZO. The said sub-rule is quite clear that the option under it is available subject to the condition that once having opted for it, benefit if any under sub-s (4) of Section 3A of the Central Excise Act, 1944 shall not be available. We find that the controversy sought to be raised stands finally settled by a decision of this Court reported in JT 2000 (4) SC 77 - Commissioner of Central Excise & Customs v. M/s. Venus Castings (P) Ltd. It has been clearly held that two procedures namely one as provided under sub-s (4) of Section 3A of the Central Excise Act and the other as provided under sub-rule 3 of Rule 96ZO of Central Excise Rules are alternative procedures and the assessee has to opt for one. Once having done so he cannot claim the benefit of the other.' 15. The Apex Court has held that the assessee has two options under Section 3A. They can opt for Annual Capacity based duty payment, which is required to be determined by the Revenue, based on various manufacturing paramaters. Secondly, they can pay based on the actual production / clearance basis. The only bar imposed is to the effect that the assessee cannot switch over from one procedure to ....
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....ws that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make Rules 96ZO, 96ZP and 96ZQ without authority of law. We, therefore, uphold the contention of the assessees in all these cases and strike down Rules 96ZO, 96ZP and 96ZQ insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Articles 14, 19(1)(g) and are ultra vires the Central Excise Act. 18. Applying this case law as also observing that the demands themselves are held as not sustainable, the interest and penalty are also set aside. 19. As a result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law. (Operative part of the order was pronounced in the open Court.) ============= Document 1 ANNEX A GOVERNMENT OF IN### NA NTRAL EXC Dated: LIMarch, 1998 Annual cassesty of production of M/s Where is ... - - M.T. ane mas communicated ta than vida tais Bravisionally et ony noter? ... 4 17. office lattar .. dated ........... Nowe under the provisions of Rule-3 of the Intuction Furnace Annual Ca....
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....is only for Rs. 16, 85, 224/-under the sub-rule( 1) of Rzte @wwwsmostatxabonar tatodal xxxxxxckt of Rule 9620. 7. That the matter of decision of C.E.Daty liability under section 3A is wder sub- judice to The Hon'le Surovere Court of India. a. The the Men'ble Supreme Court of India has pleased to order in civil appaul thet ettil, it will be onen ue the marucacturer to sub- mit che esaidea:lun on the basis of the actual production ing the skill shall be atr "insidered by the depereness in accordance with the P.T.C. 13/ 5546 Amount of Sp NOT INSURED Receivethe Registerno Central Diese Addresed Document 3 = Awkey _= VIKROMATIC STEELS PVT. LTD. VARESHVARA BAJNAT-PUP BECOHAR - 914 112 - BIHAR ----- 13.3.99. 6/98/99 Te The Commissioner of Control Excise(by name). 143,9_racvari, Telcti -. SeL .: Rentes Atetfor against arbitrary determin.tion of anovel canar ity, R .. .! Our repPububstico r.gd. with A/D letter no. ViPl/95/99/59 ct. 20.11.98. Respected sir. Kindly r.f [ to our Regal with A/D better co. VSPL/96/ 99/57 ct(23.11.98 on the above subject, which til se per saclaton of the Non'ble Suprime Court of India( Copy onclos....
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....ring kire renteo anc that this may be treated a the last opportunitte of personel hearing. But in this connection you attention is invited to our submissions es submitted batore your hono on 15th July, 1999 interalie stating therein .s under : Dear Sir, That the Showcauce nice bearin C.No.Sv(72) (15)/66/99/3526 at. 14th June, 1999 as isgood by the Deputy Commissioner of Central Dxc se, Chanbad without disclosing che documents to us so as to enable to ne but to deal with the same. 11) It we also stated is the aforesaid resresentition that on the basis of the restrospective effect of the amandes Rule 9620 of the Central Excise Rules, 1944 the matter was moved before the Hon'ble Supreme Court of Irdia on 21.4.98 wy the Union of India against the decision of the Bich Court whereby the Hos'ble Supreme Court of India in the case of Civil Appeal No.5263 or issa, Taion of India and others Vra Supreme Steels & General Mills and others, the Hon'ble Fr. Justice S.C. Agrawal,the Hon'ble ir.Justice S.Sachir Atrad ane the Hon'ble Fr. Justice A.P. Mishra were pleased to pass order which reass as undert- "Whiel the patters are percing in thi Court the Union Govechment shell noc take an....