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M/s. Arun Smelters Ltd. Versus The Customs Excise and Service Tax Appellate Tribunal, Chennai and The Commissioner of Central Excise, Chennai II Commissionerate, Chennai

2016 (9) TMI 370 - MADRAS HIGH COURT

Recovery of duty - annual capacity of production - consequential monthly duty liability fixed by the Jurisdictional Commissioner - manufacture of non-alloy steel ingots and billets - Chapter Sub-Heading No.7206.90 of the Schedule to the Central Excise Tariff Act, 1985 - Section 3A of the Central Excise Act, 1944 - CENVAT credit - Rule 57AB of the Central Excise Rules, 1944 - Held that: - the decision in the case Kalai Magal Alloys Steel Pvt. Ltd., v. CESTAT, Chennai [2014 (1) TMI 1335 - MADRAS H .....

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ition of penalty - Rule 96ZO(3) of the Central Excise Rules, 1944 - Held that: - imposition of penalty set aside. - appeal disposed off - decided partly in favor of appellant. - C.M.A.Nos.1449 and 1450 of 2000, M.P.Nos.1 of 2009 - Dated:- 19-7-2016 - MR.JUSTICE S.MANIKUMAR AND MR.JUSTICE D.KRISHNA KUMAR For the Appellant : Mr.K.Jayachandran For the Respondent : Mr. A.P. Srinivas, Senior Standing Counsel for Central Excise JUDGMENT (Judgement of this Court was made by S.MANIKUMAR, J.) Civil M .....

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Act, 1944, during compounding levy scheme. Two show cause notices were issued to the appellant on 24.03.1999, one for recovery of duty for the month of September, 1998 and the other, for recovery of duty for the period, from October, 1998 to February, 1999, both in terms of annual capacity of production and the consequential monthly duty liability fixed by the jurisdictional Commissioner. Both the notices also proposed penalty under Rule 96ZO(3) of the Central Excise Rules, 1944 (hereinafter ref .....

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32/2001 before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Regional Bench, Chennai, 1st respondent. 4. The Commissioner of Central Excise, passed another Order-in-Original No.28 of 2002, dated 16.09.2002, confirming the demand of duty under show cause notice dated 27.03.2001, on the appellant, under Section 96ZO(3) of the Rules, which was challenged in Appeal No.E/644/2002 before the Tribunal. 5. After considering the rival submissions, vide Final Order Nos.614 and 615 .....

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appellant has preferred the present Civil Miscellaneous Appeal. 6. Record of proceedings shows that on 24.06.2009, both the appeals have been admitted on the following substantial questions of law, (i) Whether on the facts and circumstances of the case, the Tribunal is right in holding that the appellant is not entitled to utilize the CENVAT Credit available for payment of duty on the products cleared under the compounding levy scheme? (ii) Whether the Tribunal is right in not appreciating the .....

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ti Steel Rolling Mills v. Commissioner of Central Excise reported in 2015 (326) ELT 209 (SC), Mr.K.Jayachandran, learned counsel for the appellants submitted that insofar as penalty is concerned, the Hon'ble Supreme Court has struck down the same. His submission is placed on record. 8. On the substantial questions of law 1 and 2, extracted supra, learned counsel for the appellants submitted that the Central Excise Act, 1944, provides for levy of duty of excise on the activity, amounting to m .....

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ain changes in the schedule of levying excise duty, in steel industry. A new provision, Section 3A came to be inserted in the Act, as an alternative method of taxation, for certain notified goods, keeping in mind, the likelihood of evasion by the manufacturers of such goods. He further submitted that the above provision changed the method of levy from quantity of goods actually manufactured to a method based on annual capacity of production fixed for the factory to be determined by the Commissio .....

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on-alloy steel manufactured in an Induction Furnace and (ii) hot rolled products of non-alloy steel manufactured or produced in a hot re-rolling steel mill. 11. Learned counsel for the appellant further submitted that as per the scheme, any unutilised balance of input credit and capital goods lying with manufacturers working under Section 3A, as on 1st September, 1997, shall lapse forthwith. He further added that notifications have been issued, specifying the rate of duty, applicable to the noti .....

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ubmitted that as per the abovesaid Rules, duty means, the duty payable under Section 3 or as per the Finance Act, Section 3A of the Central Excise Act, 1944. According to him during the period upto 15.07.2000, Rule 57AB(1b) of Cenvat Credit Rules, was in force. He further added that there was no prohibition in payment of duty, through CENVAT account. 13. He further submitted that as per Section 3A of the Act, 1944, assessees were only prohibited from taking or availing cenvat credit, during th .....

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he same amount as Cenvat credit. According to him, the duty demanded under the compounded levy scheme, can be paid through cenvat credit account on 15.07.2000, as there was no prohibition, under the Central Excise Rules, for such mode of payment. 14. He also submitted that on the date, when the compounded levy scheme was in force, there was arrears of duty and after the expiry of the scheme, the appellant earned cenvat credit, on the manufacture of goods. According to him, in the light of Sectio .....

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hat before the Punjab and Haryana High Court, appellant therein assailed the correctness of the order of the Tribunal, which held that the benefit of cenvat credit cannot be availed by the respondents/assessees, after the period covered under the compounded levy scheme and that they were required to discharge their liability only through Personal Ledger Account (In short PLA). By observing that the assessees have adhered to the rules, a Hon'ble Division Bench of Punjab and Haryana High Cou .....

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that the payment of duty is only procedural and utilizing cenvat credit for payment of central excise duty, is only revenue neutral. Referring to the orders of the Tribunal, impugned before this court, he submitted that when the appellant was permitted to avail cenvat credit and utilise the same, for payment of duty, demanded by the Commissioner of Central Excise, on the final product manufactured on or after 01.04.2000, provided of course, it is clear that the authorities have restricted paymen .....

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6ZO of the Central Excise Rules, 1944. It is also the submission that Sub-Rule (3) of Rule 96ZO of the said Rules, is a code by itself, which provides for payment of duty of ₹ 5,00,000/- per month, in two equal instalments, the first instalment latest by the 15th day of each month and the second instalment latest by the last day of each month. According to him, Sub-Rule 3 of Rule 96ZO does not impose any condition of debiting the amount, in the current account and therefore, arrears of dut .....

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for the respondent submitted that during the period of compounded levy scheme, the question of adjusting cenvat credit, does not arise. He further submitted that when the scheme has taken away the right of the manufacturers to avail cenvat credit, the consequences thereof, is to make payment of duty only in cash, within the period provided therefor, under Rule 96ZO of the Central Excise Rules, 1944. 19. Placing reliance on the decision of the Hon'ble Apex Court in Hans Steel Rolling Mill v. .....

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viting the attention of this Court to the decision in Hans Steel Rolling Mill's case (cited supra), learned counsel for the revenue submitted that when the scheme has been declared by the Apex Court as a comprehensive scheme in itself, and when the general provisions of the Central Excise Act, 1944 and the rules made thereunder, regarding method, determination of duty and mode of payment of such duty, are excluded, during the relevant period, it is not open to the appellant to claim that cen .....

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paid by remitting in the Personal Ledger Account maintained by the manufacturer. It is therefore, his submission that when the scheme has been declared by the Hon'ble Apex, the assessee's contention contrary to the scheme and the decision of the Hon'ble Apex Court, has to be rejected. 22. With reference to the above said submissions, learned counsel for the revenue also invited the attention of this Court to the relevant provisions. He further submitted that between the period, from .....

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was no reference to the judgment of the Hon'ble Apex Court in Hans Steel Rolling Mill's case (cited supra). For the reasons, stated supra, he prayed for dismissal of the Civil Miscellaneous Appeals. Heard the learned counsel appearing for the parties and perused the materials available on record. 24. Before adverting to rival contentions, let us have a cursory look at the relevant rules and the Compounded Levey scheme, operational from 01.09.1997 to 31.03.2000. As per Rule 2(7) of the Ce .....

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special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods excluding goods produced or manufactured in special economic zones specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the .....

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ed outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). Explanation 1:- Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at diff .....

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1 (65 of 1951), and the rules made under that Act.; (iii) "Special Economic Zone" has the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005). (1A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government. (2) The Central Government ma .....

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excisable goods of the same class or description - (i) produced or manufactured by different classes of producers or manufacturers; or (ii) sold to different classes of buyers : Provided that in fixing different tariff values in respect of excisable goods falling under sub-clause (i) or sub-clause (ii), regard shall be had to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such goods. By Finance .....

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he opinion that is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section. (2) Where a notification is issued under sub-section (1), the Central Government may, by rules,- (a) provide the manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an off .....

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ot below the rank of Assistant Commissioner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation only during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production: Provided further that in a case where the factor relevant to the production is altered or modified at any .....

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ot produce the notified goods during any continuous period of fifteen days or more, duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed. (4) The provision of this section shall not apply to goods produced or manufactured, by a hundred per cent export - oriented undertaking and brought to any other place in India. Explanation 1: For the removal of doubts, it is hereby clarified that for t .....

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it in section 3. Explanation 3: For the purposes of sub-section (2) and (3), word "factor" includes "factors". 25. Between 3 and 3A of the Act, indisputably, there is a change in the method of arriving at the duty payable by the assessee. When Section 3 of the Act, speaks about excisable manufactured, in contrast, Section 3A, introduced by Finance Act, 1997, speaks about the annual production capacity of the manufacturer, determined by the Commissioner with reference to the .....

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f 1986) (hereinafter referred to as the said First Schedule), leviable under the Act; (ii) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985, leviable under the Central Excise Act, 1944 in relation to the goods falling under sub-heading Nos. 2401.90, 2404.40, 2404.50,2404.99,5402.20,5402.32,5402.42, 5402.43,5402.52,5402.62, 5703.90, 8415.00, 8702.10, 8703.90, 8706.21, 8706.39 and 8711.20 of the said First Schedule; (iii) the additional duty of excise levi .....

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d under clauses (i), (ii), (iii) and (iv) above, paid on any inputs or capital goods received in the factory on or after the first day of April, 2000. Explanation. -For removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENV AT credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) on goods falling under Chapter heading No. 98.01 of the First Schedule to the said Customs Tariff Act. (b) The CENV AT credit may be .....

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d in the said factory, and such removal shall be made under the cover of an invoice prescribed under rule 52A. (2) Notwithstanding anything contained in sub-rule (1) - (a) credit of duty in respect of inputs or capital goods produced or manufactured- (i) in a free trade zone and used in the manufacture of the final products in any other place in India; or (ii) by a hundred per cent export-oriented undertaking or by a unit in an Electronic Hardware Technology Park or Software Technology Parks and .....

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cial Importance) Act, 1957 (58 of 1957); and (iii) the additional duty under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i) and (ii) above shall be utilised only towards payment of duty of excise leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, or under the said Additional Duties of Excise (Goods of Special Importance) Act, on any final products manufactured by the manufacturer or for payment of such .....

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under heading No. 54.02, who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yam of polyesters falling under sub-heading No. 5402.42 of the said First Schedule. (d) credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 198 .....

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in demanding a sum of ₹ 16,06,507/-, as duty, for the period from October, 1998 to February, 1999 and imposing penalty. Compounded levy scheme, under Section 3-A was in force, during the period from 01.09.1997 to 31.03.2000 and it was revoked from 01.04.2000. As per the submission of the learned counsel for the appellant, the total amount of duty payable for the period between October' 1998 and February' 1999, under the 2nd show cause notice, dated 24.03.1999, was ₹ 43,12,500 .....

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pondent, has also accepted the payment made through PLA, but disapproved the payment of ₹ 16,06,507/-, made through cenvat credit. Therefore, vide order, dated 27.03.2001, the 2nd respondent has demanded a sum of ₹ 16,06,507/-. By a separate order, dated 16.09.2002, the Commissioner of Central Excise, Chennai II Commissionerate, 2nd respondent, has imposed a penalty of ₹ 16,06,507/- on the appellant. Two things, the 2nd respondent has done. One, that the payment of excise duty .....

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said amount only through Personal Ledger Account and then, equal amount can be availded as cenvat credit. 30. The substantial question of law, raised before us, relating to penalty as to, whether the order of the Tribunal is right in holding that penalty is leviable on the facts and circumstances of the case, and that the quantum should be reduced. In a decision of the Hon'ble Apex Court in Shree Bhagwati Steel Rolling Mills v. Commissioner of Central Excise reported in 2015 (326) ELT 209 ( .....

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Srinivas, learned Senior Standing Counsel for Central Excise submitted that the law laid down by the Hon'ble Supreme Court in Shree Bhagwati Steel Rolling Mills's case (cited supra), is binding. Recording the said submission, the appellant stand to succeed in C.M.A.No.1450 of 2009, on the substantial question of law, extracted supra, as regards penalty. Respectfully following the above decision, the third substantial question of law, viz., Whether the order of the Tribunal is right in ho .....

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yment of duty on the products cleared under the compounding levy scheme? (ii) Whether the Tribunal is right in not appreciating the legal position that in terms of Rule 2(7) of Central Excise Rules, duty means duty payable under Sections 3 and 3A of the Act and in Rule 57AB(1B) of the Central Excise Rules, there is no prohibition to utilise the available CENVAT credit amount? 33. On the above, it is the case of both the parties that during the period between 01.09.1997 to 31.03.2000, when the co .....

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um of ₹ 27,25,000/-, has been paid through the Personal Ledger Account maintained by the assessee. According to the appellant, admittedly there was arrears of ₹ 16,06,500/- to be paid, during the period, when the compounded levy scheme was in force. 34. Rule 96ZO of the Central Excise Rules, 1944, operational during the scheme, deals with the procedure to be followed, by the manufacture of ingots and billets, and the said rule is extracted hereunder: (1) A manufacturer of non-alloy s .....

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paid in the following manner :- I. Total amount of duty liability for the period from the 1st day of 1 September, 1997 to the 31st day of March, 1998 (a) a manufacturer shall pay a total amount calculated at the rate of ₹ 750 per metric tonne on capacity of production of his factory for the period from 1st dayof September, 1997 to the 31stday of March, 1998, as determined under the Induction Furnace Annual Capacity Determination Rules, 1997. This amount shall be paid by 31st day of March, .....

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he 31st day of March, 1998) along with interest at the rate of eighteen percent per annum on such outstanding amount calculated for the period from the 1st day of April, 1998 till the date of actual payment of the outstanding amount : Provided that if the manufacturer fails to pay the total amount of duty payable under clause (a) by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on 30th day of April, 1998 or five thousand rupees, .....

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turer, if any, during the financial year shall be adjusted towards the total amount of duty liability; (c) if a manufacturer fails to pay the total amount of duty payable under clause (a) by the 31st day of March, of the relevant financial year, he shall be liable to, - (i) pay the outstanding amount of duty (that is the amount of duty which has not been paid by the 31st day of March of the relevant financial year) along with interest at the rate of eighteen per cent. per annum on such outstandi .....

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to confiscation and the manufacturer shall be liable to a penalty not exceeding three times the value of such goods, or five thousand rupees, whichever is greater. (2) Where a manufacturer does not produce the ingots and billets of non- alloy steel during any continuous period of not less than seven days and wishes to claim abatement under sub-section (3) of section 3A of the Central Excise Act, 1944, the abatement will be allowed by an order passed by the Commissioner of Central Excise of such .....

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eputy Commissioner of Central Excise1, with a copy to the Superintendent of Central Excise, immediately after the production in his factory is stopped along with the closing balance of stock of the ingots and billets of non-alloy steel; (c) the manufacturer, when he starts production again, shall inform in writing about the starting of production to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise1, with a copy to the Superintendent of Central Excise, either .....

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sed for a continuous period starting from -hours on -(date) to -hours on -(date). (3) Notwithstanding anything contained elsewhere in these rules, if a manufacturer having a total furnace capacity of 3 metric tonnes installed in his factory so desires, he may, from the first day of September, 1997 to the 31st day of March, 1998 or any other financial year, as the case may be, pay a sum of rupees five lakhs per month in two equal installments, the first installment latest by the 15th day of each .....

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September, 1997 the Commissioner may allow a manufacturer to pay the sum of rupees five lakhs by the 30th day of September, 1997: Provided further that if the capacity of the furnaces installed in a factory is more than or less than 3 metric tonnes, or there is any change in the total capacity, the manufacturer shall pay the amount, calculated pro rata: provided also that where a manufacturer fails to pay the whole of the amount payable for any month by the 15th day or the last day of such mont .....

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the duty payable for each of the months from September, 1997 to March, 1998 by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on 30th day of April, 1998 or five thousand rupees, whichever is greater. Explanation - For removal of doubts it is hereby clarified that sub-rule (3) does not apply to an induction furnace unit which ordinarily produces castings or stainless steel products but may also incidentally produce non-alloy steel .....

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lity for the manufacture of ingots and billets of non-alloy steel undersection3A of the Central Excise Act, 1944 (l of 1944). Dated......... Sd............. Name and Designation (With Stamp)" 35. Reading of the rules, extracted supra, makes it clear that a manufacturer of non-alloy steel ingots and billets, falling under sub-heading Nos. 7206.90 and 7207.90 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), shall debit an amount calculated at the rate of ₹ 750 per met .....

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ZO(I), the total amount of duty liability for the period from 1st September, 1997 to 31st March, 1998, as determined under the Induction Furnace Annual Capacity Determination Rules, 1997, shall be paid by 31st March, 1998. Similarly, as per Rule 96ZO(II), the total amount of liability for a financial year, subsequent to 1997-98, shall be paid by 31st March of the financial year. As per Rule 96ZO(II)(3), notwithstanding anything contained elsewhere in these rules, if a manufacturer having a total .....

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from the 1st day of September, 1997 to the 31st day of March, 1998, or any other financial year, as the case may be, subject to the condition that the manufacturer shall not avail of the benefit, if any, under sub-section (4) of the section 3A of the Central Excise Act, 1944 (1 of 1944). Here again, we have taken note of the stipulation, as to, when the duty has to be paid. 37. Reading of the provisions, when the Compounded Levy Scheme, was in force, in entirety, makes it clear, as to how, the .....

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e for payment of duty. The then existing provision also provided for imposition of penalty for failure to pay the total amount of duty, payable within the period provided therefor, in the manner, as provided therefor, under the compounded levy scheme. 38. Method of arriving at the duty payable by the manufacturer of non-alloy steel ingots, during the scheme, manner of payment, ie., in the account maintained by the manufactuer, under sub-rule (1) of rule 173G of the Central Excise Rules, 1944, ti .....

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r produced in a hot re-rolling steel mill and accordingly, held by the Apex Court. 39. Though Mr.K.Jayachandran, learned counsel for the appellant submitted that sub-Rule (3) of Rule 96ZO(II) of the Central Excise Rules, 1944, opens with a notwithstanding clause and therefore, arrears of duty, payable between 01.09.1997 to 31.03.2000, can be paid through cenvat credit, earned after 31.03.2000 and that payment through personal ledger account, is not specifically provided for, in sub-rule (3) of r .....

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to the condition contained therein, this Court is not inclined to accept the said contentions, for the reason that the duty payable during the period September, 1998 and also for the period, from October, 1998 to February, 1999, ought to have been paid, within the specific dates, mentioned in Rule 96ZO of the Central Excise Rules, 1944 and failure of which, entails penalty. Of course, by virtue of the judgment, penalty alone has been struck down. When the time for payment, the manner therefor, .....

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squarely applies to this case also in construing the scope of compounded levy scheme. Therefore, neither the assessee nor the department can act in variance with the terms of the compounded levy scheme. 40. The Hon'ble Supreme Court in State of Jharkhand v. Ambay Cements reported in 2005 (1) CTC 223, at Paragraph 27, held as follows: "27. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said req .....

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77; 43,12,500/-, through personal ledger account and taking note of the payment of ₹ 27,25,000/- through Personal Ledger Account, the Commissioner of Central Excise, has demanded a sum of ₹ 16,06,507/-, to be paid through the personal ledger account. 42. Now let us consider the decisions relied on by the learned counsel appearing for both the parties. The main thrust of the appellant is on the decision of the Punjab and Haryana High Court in Commissioner of Central Excise, Ludhiana v .....

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and finding fault with the procedure in payment of duty, the Adjudicating Authority i.e., the Joint Commissioner, Customs & Central Excise confirmed the demand and also imposed interest. He disallowed the duty discharged through Cenvat account. Penalty of equal amount was also confirmed. When the correctness of the same was tested by the respondent therein, the appellate authority confirmed the decision, excluding the levy of interest, and imposition of penalty. In the second appeal, decisio .....

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ab and Haryana High Court, in Punjab Casting Pvt. Ltd.,'s case (cited supra), at Paragraph 10, held as follows: 10. It is evident from these findings that both the appellate authorities had found no fault with the mode of payment of excise duty by the respondents. Cenvat account of the respondents had sufficient credit and they discharged their duty liability through the same instead of making payment through PLA; there is neither loss to the revenue nor there is evasion of duty. 43. Though .....

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eel Rolling Mill v. Commissioner of Central Excise, Chandigarh reported in 2011 (265) ELT 321 (SC). The Hon'ble Apex Court, after going through the scheme and the material on record, at Paragraphs 12 to 14, held as follows: 12. On going through the records it is clearly established that the appellants are availing the facilities under the Compound Levy Scheme, which they themselves, opted for and filed declarations furnishing details about annual capacity of production and duty payable on su .....

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time and manner of payment and it also contains provisions relating to payment of interest and penalty in event of delay in payment or non-payment of dues. Thus, this is a comprehensive scheme in itself and general provisions in the Act and Rules are excluded. 13. The judgments of this court in the cases of Commissioner of C.Ex & Customs v. Venus Castings (P) Ltd., reported in 2000 (117) ELT 273 (SC) and Union of India v. Supreme Steels and General Mills reported in 2001 (133) ELT 513 (SC), .....

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ion which stipulates limitation for every kind of action to be taken under the Act or Rules. An example can be drawn with the Modvat Scheme, because even in that particular scheme, Section 11A of the Act had no application with regard to time limit in the administration of that scheme. 44. When the judgment of the Hon'ble Supreme Court has declared that the compounded levy scheme as a comprehensive scheme and also categorically held that the general provisions of the Act and the Rules, are e .....

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y, is only revenue neutral and the other contentions on general principles, also cannot be accepted in the light of the subsequent decision of the Hon'ble Supreme Court in Hans Steel Rolling Mill's case (cited supra), which has exclusively dealt with the compounded levy scheme. 46. In Kalai Magal Alloys Steel Pvt. Ltd., v. CESTAT, Chennai reported in 2014 (303) ELT 44 (Mad.), the assessee therein was issued, with a show cause notices, for payment of duty, for ₹ 14,68,564/- for the .....

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ubstantial questions of law. The department placed reliance on the decision of the Hon'ble Supreme Court in Hans Steel Rolling Mill's case (cited supra). Submissions have been advanced that compounded levy scheme is a separate scheme, by which, a procedure for determining the payment, has been made and the question of applying Section 11A to such scheme, does not arise. 47. Reading of Kalai Magal Alloys Steel Pvt. Ltd.,'s case (cited supra) shows that contentions have been made that .....

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sessee. Yet another substantial question of law, raised therein was, whether Rule 96ZP of Central Excise Rule, 1944 and Section 3A of the Central Excise Act, 1944 are the charging provisions and also provide for machinery for recovery of due? Dealing the above substantial questions of law and on the facts and circumstances of the said case, a Hon'ble Division Bench of this Court, in Kalai Magal Alloys Steel Pvt. Ltd.,'s case (cited supra), at Paragraph 8, held as follows: The Hon'b .....

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l capacity production under Section 3 of the Act and Hot Re-roling Steel Mills Annual Capacity Determination Rules, 1997, is a separate scheme from the normal scheme for collection of central excise duty on goods manufactured in the country and under the same Rules, Rule 96P stipulates the method of payment of duty and it contains a provision regarding time and manner of payment and it also contains provisions regarding the payment of interest and penalty in the event of delay in payment or non- .....

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gard to the Modvat Scheme and was further held that even in that particular scheme, Section 11A of the Act had no application with regard to the time limit in the administration of that scheme. The Hon'ble Supreme Court further took note of the decision in the case of Commissioner of Central Excise & Customs v. Venus Castings (P) Ltd., (supra) and held that it has squarely laid down the principle that compounded levy scheme is a separate scheme altogether and the assessee opting for the .....

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