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2013 (2) TMI 492 - AT - Central ExciseDemand proceeding - Matter under litigation - Premature demand - Compounded levy scheme - Annual Capacity of Production - Held that - Where original order fixing the duty liability itself is challenged and remanded by the Hon ble CESTAT for reconsideration, it is evident that as of today there is no valid legal order fixing the duty liability during the material period. When there is no such valid legal order, the demands raised based on the impugned order issued by the Commissioner cannot sustain. The demands are premature. Therefore, keeping in view of the Hon ble CESTAT s order, the demands raised in the above three show cause notices are not sustainable and are to be dropped. In favour of assessee
Issues:
Appeal against dropping of duty demands and connected proposals based on ACP determination. Analysis: The judgment pertains to an appeal filed by the Commissioner of Central Excise against the dropping of demands of duty and connected proposals raised in three show-cause notices issued to the respondent. The respondent was operating under the compounded levy scheme for discharging duty liability on their products during the disputed period. The Tribunal had previously set aside the Annual Capacity of Production (ACP) determined by the Commissioner and directed a redetermination. However, the Commissioner failed to re-determine the ACP as per the Tribunal's order. Subsequently, the demands of duty and connected proposals were dropped by the Commissioner based on the original ACP, which was challenged by the department. The Tribunal agreed with the impugned order, highlighting that there was no valid legal order fixing duty liability during the material period due to the challenge and remand by the Tribunal. Therefore, the demands raised were deemed premature and unsustainable in the absence of a valid legal order. In conclusion, the appeal of the department was dismissed as the demands raised in the show-cause notices were considered premature and not sustainable in light of the Tribunal's order setting aside the original ACP determination by the Commissioner. The judgment emphasizes the importance of a valid legal order in determining duty liability and the consequences of premature demands based on challenged orders.
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