2007 (3) TMI 26 - AT - Central Excise

Demand Revenue contended that assessee were liable to pay differential duty after allowing adjustments After considering all the details held that impugned demand of differential duty can t sustained

Summary

Issues:
1. Appeal against Commissioner (Appeals) order confirming demand and interest under Central Excise Act, 1944.
2. Application under Rule 96ZNA rejected, leading to demand of Rs. 4,30,658/- for short-paid duty.
3. Assessee's failure to respond to show cause notice and attend personal hearing.
4. Contention for adjusting excess duty paid in other months against short payment in June 2001.
5. Violation of principle of natural justice.
6. Interpretation of provisions under Rule 96ZNA and Rule 96ZNC for duty payment.
7. Discrepancy between duty paid and liability under Section 4, leading to appeal allowance.

Detailed Analysis:
1. The appeal challenges the Commissioner (Appeals) order upholding the demand of Rs. 4,30,658/- and interest under Central Excise Act, 1944. The appeal was made against the Order-in-Original confirming the demand and interest under Section 11AB of the Act, read with Rule 8 of the Rules, 2001.

2. The rejection of the assessee's application under Rule 96ZNA led to the demand for short-paid duty of Rs. 4,30,658/-. The rejection was based on failure to fulfill conditions prescribed in the rule. The duty was calculated based on the clearance of processed fabrics in June 2001, after the rejection of the application.

3. The assessee did not respond to the show cause notice or attend the personal hearing, leading to the adjudicating authority determining the duty amount as short-paid. The authority considered the duty payable under Section 4 for June 2001, adjusting the amount paid under Rule 96ZNA.

4. The appellant contended for adjusting excess duty paid in other months against the short payment in June 2001. However, the Commissioner (Appeals) rejected this plea, stating that the issue was specific to duty short-paid in June 2001. The plea for adjusting excess duties in other months was deemed a separate matter.

5. The contention of violation of natural justice was dismissed by the Commissioner, as the appellant did not respond to the show cause notice or attend the hearing, indicating no breach of principles of natural justice.

6. The interpretation of provisions under Rule 96ZNA and Rule 96ZNC was crucial for duty payment. The appellant's obligation to pay duty under these rules during the pendency of the application was highlighted, with specific payment deadlines and consequences for non-payment.

7. The discrepancy between duty paid and liability under Section 4 led to the appeal being allowed. The total duty paid by the appellant was found to exceed the liability under Section 4, indicating the satisfaction of duty payment. The impugned demand for differential duty amount was set aside, and the appeal was allowed.