TMI Blog2011 (2) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... BY : S/Shri K.K. Anand, Advocate and O.P. Agrawal, C.A., for the Appellant. Shri B.K. Singh, Jt. CDR, for the Respondent. [Order per : Rakesh Kumar, Member (T)]. The facts giving rise to these appeals are, in brief, as under. 1.1 The appellants are manufacturer of Stainless Steel Pattas and Pattis, chargeable to Central Excise Duty under Central Excise Tariff. The period of dispute in these appeals is from September 2001 to March 2002. During this period, the appellants were discharging duty liability on SS Pattas and Pattis under compounded levy scheme notified by Central Government vide Notification No. 34/2001-C.E., dated 28-6-2001. According to this scheme, the appellants were required to apply for permission for working under the said scheme and on being permitted, they were required to pay duty @ Rs. 15,000/- per month per Cold Rolling Machines installed in the factory, subject to condition that they would not take Cenvat credit of duty paid on any raw materials or capital goods under the provisions of Cenvat Credit Rules. As per para 3 of the Notification, a manufacturer whose application has been granted under para 2, shall pay a sum calculated at a rate spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mayank Steel Industries and Shri O.P. Agrawal, C.A., learned Counsel appearing for M/s. Balaji S.S. Sheets (P) Ltd. pleaded that prior to the scheme of compounded levy for manufacturers of Stainless Steel Pattas/Pattis under Notification No. 34/2001-C.E. (N.T.), dated 28-6-2001, there were Rule 96ZA to 96ZGG of Central Excise Rules, 1944, which prescribed an identical compounding procedure for discharging duty liability in respect of Stainless Steel Pattas/Pattis and Aluminium Circles, that provisions of Rule 96ZA to 96ZGG are identical to the provisions of compounded levy scheme notified under Notification No. 34/2001-C.E. (N.T.), that in respect of the compounded levy scheme under Rule 96ZA to 96ZGG, Hon ble Rajasthan High Court in the case of CCE, Jaipur-II v. Jupiter Industries reported in 2006 (206) E.L.T. 1195 (Raj.) has held that no duty is leviable for the period when a machine has not been operated or has been dismantled, as when there is no production in respect of a machine, which is not in existence, there is no question of charging any Central Excise Duty in respect of that machine, that in this case Hon ble Rajasthan High Court also held that the principle of unjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the machine after starting the operations under this procedure is not material and that the duty liability has to be discharged on the basis of maximum number of machines during preceding three months, as declared at the time of applying for permission to operate under this procedure and in the application for removal being made to the Superintendent every month and that in view of this, there is no infirmity in the impugned order. 3. We have carefully considered the submissions from both the sides and perused the records. Under Rule 15(1) of the Central Excise Rules, 2001, the Central Government may, by Notification, specify the goods, in respect of which an assessee shall have option to pay the Excise Duty on the basis of such factors as may be relevant to production of such goods and as such rate as may be prescribed in the such Notification, subject to such limitations and conditions including, those relating to interest or penalty, as may be specified in such Notification. Under Rule 15(1) of the Central Excise Rules, 2001, the Central Government has issued Notification No. 34/2001-C.E., dated 28-6-2001 by which the compounding scheme for payment of duty on Stainless Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification, shall make an application in a prescribed form (Appendix II) to the Notification, to the Superintendent incharge of the factory for permission to remove Stainless Steel Pattas/Pattis from his premises during the ensuing month, declaring the maximum number of cold rolling machines installed by him on his behalf in one or more premises at any time during three calendar month immediately preceding the calendar month in which such application has been made. As per para 4(3), the manufacturer shall also intimate the Superintendent in writing for any proposed change in the number of cold rolling Machines installed by him or in his behalf and obtain written approval of such officer before making any such change. On the basis of para 3 and 4 of the Notification, the Department s contention is that if after obtaining the permission to operate under the compounded levy scheme and starting the operation under this scheme on the basis of maximum number of machines declared, the manufacturer dismantles some machines in a particular month, for three months following the month in which the machines had been dismantled, he will have to pay duty on the basis of the maximum number of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the application has been made and that the sum payable is to be calculated by application of the specified rate to the maximum number of cold rolling Machines installed by or on behalf of such manufacturer in one or more premises at any time during three calendar months immediately preceding the calendar month in which the application has been made. The implication of these provisions is that if a manufacturer operating under this special procedure dismantles some machines in a particular month, as a result of which the number of machines decreases, even then, up to three months he will be required to pay duty even on the dismantled machines, as the amount payable is linked with the maximum number of machines installed during the preceding three months. However, while interpreting these provisions of Rule 96ZA to 96ZGG of the Central Excise Rules, 1944, Hon ble Rajasthan High Court in the case of CCE, Jaipur-II v. Jupiter Industries (supra) held that no duty would be payable in respect of the dismantled machines. In this regard para 23, 24 and 25 of the judgment are reproduced below :- 23. It goes without saying that, if in any particular month, no machine is operated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above, the provisions of Rule 96ZA to 96ZGG of the Central Excise Rules, 1944, as the same existed during the period prior to 28-6-01 are in pari materia with the provisions of Notification No. 34/01-C.E. (N.T.), dated 28-6-01 the judgment of Hon ble Rajasthan High Court in the case of CCE, Jaipur-II v. Jupiter Industries (supra) would be applicable to the case in hand. No contrary judgment of any High Court or Hon ble Supreme Court has been produced. 6. Moreover we also find that para 1 of the Notification No. 34/2001-C.E. (N.T.) talks of the assessee having an option to pay the duty in respect of cold rolled Stainless Steel Pattas/Pattis on the basis of cold rolling machines installed for cold rolling of these goods - thereafter para fixes the rate per machine per month. When the first para of the Notification talks of payment of duty on the basis of cold rolling machines installed and not on the basis of the maximum number of cold rolling machines installed during the preceding three months, notwithstanding the provisions of para 3(1) and 4(1) of the Notification No. 38/2001-C.E. (N.T.), dated 28-6-2001, the duty can be charged only on the basis of actual number of cold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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