TMI Blog2010 (2) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... introduced - petitioner opted for duty under Rule 96ZP(3) of the Central Excise Rules for 1997-1998 - It is alleged that petitioner opted to pay duty as per actual production under Section 3A(4) of the Central Excise Act, 1944 read with Rule 96ZP(1) of the Central Excise Rules - contended that the option was not for the period in dispute, but for the next financial year – Held that:- Tribunal has disposed of the stay application cursorily, by recording that the appellant had not been able to make out a case for total dispensation of duty and penalty - It is also difficult to appreciate the basis on which the learned Tribunal directed payment of Rs. 4,00,000/-. The order impugned does not discuss the basis for directing the appellant to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was withdrawn and duty was levied under Section 3A of the Central Excise Act, 1944 and/or, in other words, levied under the compounded levy scheme. 4. Under sub-rule (1) of Rule 96ZP of the Central Excise Rules, 1944 read with Section 3A(4) of the Central Excise Act, 1944, duty is payable on the basis of actual production as per the applicable rate of duty. 5. Sub-rule (3) of Rule 96ZP, however, gives option to an assessee to opt for assessment of duty, on the basis of the production capacity of the factory, as determined by the Central Excise Authorities. 6. It is well settled that the two procedures - one under Section 3A(4) of the Central Excise Act, 1944 read with Section 96ZP(1) of the Central Excise Rules for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 96ZP on the basis of total furnace capacity. The manufacturer could not, however, opt twice during one financial year, first choosing to pay in accordance with sub-rule (3) of Rule 96ZO and thereafter switchover to actual production basis under Section 3A(4) of the Act in case the duty as per actual production was less. 12. The petitioner has submitted that there was virtually no production in the petitioner s factory during the financial year in question except for a short period of 28 days, between 19th June, 1999 and 16th July, 1999. It is alleged that the factory was completely closed during the rest of the period and in fact, supply of electricity was disconnected on 6th September, 1999. 13. It is, however, not for this Court e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealed against the aforesaid orders-in-original to the Commissioner of Central Excise (Appeals). 18. By the order dated 25th November, 2003, 30th December, 2003 and 20th January, 2004 respectively, the Commissioner of Central Excise (Appeals) rejected the appeals of the petitioner. The petitioner filed three appeals before the learned Tribunal against the order in appeals. The petitioner also applied for stay of the orders impugned. 19. By a common Order No. S-154/KOL/05, dated 4th March, 2005, the learned Tribunal disposed of the three appeals directing the petitioner to pre- deposit Rs. 4,00,000/-. The appeals have subsequently been dismissed on the ground of non-compliance of the order for pre-deposit of Rs. 4,00,000/-. The relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had not been able to make out a case for total dispensation of duty and penalty. It appears that the Tribunal proceeded on the basis that the appellant had opted for 96ZP(3) of the erstwhile Rules of 1944 and, therefore, under an obligation to discharge the duty liability on its annual production capacity determined by the Commissioner, Central Excise. 22. There can be no doubt that an assessee who opted for Rule 96ZP(3) of the 1944 Rules, as in force at the material time, would necessarily have to discharge its duty liability on the basis of its annual production as determined by the Commissioner, Central Excise. 23. However the prima facie merits of the contention of the petitioner that the petitioner had not exercised option under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the requirement itself and the benefit which the applicant would derive from compliance with it. Undue hardship meant something which was not merited by the conduct of the claimant or was very much disproportionate to it. Undue hardship was caused when the hardship was not warranted by the circumstances. 27. Unfortunately, this aspect has not at all been considered in the proper perspective. Be it noted that the Commissioner (Appeals) has also not given any finding with regard to the submission of the petitioner that the option exercised by the petitioner for payment of duty as per production capacity did relate to the financial year 1999-2000. The contentions raised by the petitioner with regard to the issues have not at all be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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