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2014 (1) TMI 1335 - MADRAS HIGH COURTDemand of duty - Manufacturing activity stopped due to hardship - Inability to pay excise duty - Invocation of Section 11A - Imposition of Compounded levy of tax - Held that:- On a perusal of Rule 96ZP of the Rules, it is evidently clear that it is a procedure of self-assessment where the manufacturers of hot re-rolled products falling under the different sub-headings in the Central Excise Tariff Act, are bound to debit the amount calculated at the rate of ₹ 400/- per metric tonne at the time of clearance from the factory in the account-current maintained under Rule 173G(1) of the Central Excise Rules, 1944, and the duty liability is to be complied as detailed in Clauses I and II under Rule 96ZP of the Rules. In terms of sub-rule (1A) of Rule 96ZP, if a manufacturer removes any of the said products without complying with the requirements of that sub-rule, such goods are liable to confiscation and the manufacturer shall be liable to a penalty not exceeding three times the value of goods or ₹ 5,000/-, whichever is greater. Sub-rule 3 of Rule 96ZP starts with a non-obstante clause and in fact, it is a facility given to the manufacturer, by which, the manufacturer, may, in the beginning of each month from 1st day of September, 1997 to 31st day of March, 1998 or any other financial year, pay a sum equivalent at the rate of ₹ 300/- multiplied by the annual capacity in metric tonnes. We term this as a facility in the light of Clause I(a) to Rule 96ZP, which mandates the amount to be paid at the rate of ₹ 400/- per metric tonne by 31st day of March, 1998. Imparting the elements of the scheme of tax administration/recovery under Section 11A to a specially compounded levy scheme as provided under Rule 96ZP, would be wholly arbitrary and it would disturb the very functioning of the special scheme and the time limit prescribed under the special scheme, cannot be done away with by the time limit specified under the normal procedure under Section 11A - assessee had come under the compounded levy scheme with effect from 1997 and when they switched over to this, the credit lying unutilised, be in the inputs or in the final products, lapsed in terms of sub-rule (17) of Rule 57F - assessee has availed the benefit of a specially compounded levy scheme - therefore question of adjustment of the modvat credit as against the liability under Rule 96ZP, does not arise. However, it is open to the assessee to seek for reversal of credit, if any, lying to their credit, if so permitted under law - Following decision of COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY V. SHARADHA CASTINGS (P) LTD. [2009 (4) TMI 525 - MADRAS HIGH COURT] - Decided partly in favour of assessee.
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