TMI BlogApplication of section 3A of the Central Excise Act, 1944 to Induction - Furnaces - reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... el classifiable under sub-heading Nos. 7206.90 and 7207.90 of the Schedule to Central Excise Tariff Act, 1985. These goods have accordingly been specified as "notified goods" under sub-section (1) of section 3A, vide notification No. 23/97-Central Excise (NT), dated the 25th July, 1997. 3. As consequence, rules have been notified for determination of the annual capacity of production of a factory producing such notified goods. These rules, known as the Induction Furnace Annual Capacity Determination Rules, 1997, have been incorporated in notification No. 24/97-CE(NT), dated the 25th July, 1997. 4. The salient features of these rules are mentioned below: (a) The rules apply to an induction furnace unit producing ingots and billets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken to be 3200 times the capacity of the such furnaces (in metric tonnes). 6. In this context, it is understood that some induction furnace units have, what they call "idle" crucible. It is reported that at any point of time only one crucible is used and the other remains idle. In such cases, it is claimed, the induction furnace unit has one transformer and one electrical panel. As such the capacity of the induction furnace is relatable to crucible (s), excluding the "idle (spare or standby)" crucible. This aspect may kindly be examined on basis of facts of each such case and the furnace capacity may be ascertained accordingly. 7. It is understood that the capacity of a furnace (crucible) is generally indicated on the manufacturer's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility for the manufacturer of ingots or billets of mild steel. This is contained in sub-rule (3) of rule 96ZO. such amount will be paid on TR-6 challan. 11. According to the sub-rule (3) of rule 96ZO, if the total furnace capacity of a factory is 3 metric tonnes, the factory can exercise the option to pay an amount of Rs. 5 lakhs every month towards full discharge of its duty liability. It may be noticed that this amount is to be paid by the 10th of the month, except for the month of August, 1997 when it can be paid by 31.8.97. Otherwise, interest @ 18% per annum would become chargeable as mentioned in the rule. 12. It may also be observed that a manufacturer who wishes to exercise the option of discharging his duty liability under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting the amount already paid. This is explained by following illustration. 16. Suppose the capacity of production of a factory for the period 1.8.97 to 31.3.98 is 6400 x 750 i.e. Rs. 48 lakhs. Assuming that on the basis of payment of duty at the rat of Rs. 750/- PMT on day to day clearances, the factory has paid a total sum o Rs. 45 lakhs upto 31.3.98. In that event the factory is required to pay an additional sum of Rs. 3 lakhs by 31.3.98. this additional amount of Rs. 3 lakhs could be paid as one-time payment or in more than one instalment by way of on-account payments; but the total amount of Rs. 3 lakhs is required to be paid by 31.3.98. Otherwise, the factory is liable to pay interest at the rate of 18% p.a. which is to be calculate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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