TMI Blog2017 (5) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (3) or sub-section (4) of Section 3A - demand upheld. Penalty u/r 96ZP(3)(ii) - Held that: - reliance was placed in the case of M/s. Shree Bhagwati Steel Rolling Mills Versus Commissioner of Central Excise & Another [2015 (11) TMI 1172 - SUPREME COURT], where it was held that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make rules 96ZO, 96 ZP and 96 ZQ without authority of law - penalty set aside. Appeal allowed - decided partly in favor of appellant. - E/799/06 - A/86899/17/EB - Dated:- 19-4-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri A.P. Kalte, Advocate for the appellant Shri N.N. Prabhudesai, Supdt.(AR) for the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ELT 1097. 3. As regard the penalty imposed under 96ZP(3)(ii) the appellants relied on the decision of Hon'ble Apex Court in Shree Bhagwati Steel Rolling Mills 2015 (326) ELT 209. 4. Ld. AR relied on the impugned order. he relied on the decision of the Hon'ble High Court of Bombay in the case of Rajuri Steels Pvt. Ltd. 2008 (225) ELT 189 to assert that the benefit of proviso to sub-section (3) and (4) of erstwhile Section 3A of Central Excise Act, 1944 is not available to assessee if he has enjoyed the benefit of excise duty under procedure prescribed by Rule 96ZP(3) of the Central Excise Rules, 1944. Ld. AR also relied on the apex court in UOI vs. Supreme Steels General Mills to assert that the manufacturer cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated pro-rata on the basis of the annual capacity of production determined in the above manner stated in Rule 3. No where in these rules, there is any provision to determine the production capacity of a mill on the basis of the facts obtaining in the preceding year. The lower appellate authority has also not referred to any provisions which has led him to observe that the benefit of the closure in a particular year will accrue to an assessee for fixing the ACP for the succeeding year. The Commissioner (Appeals) has relied upon the judgment of Hon'ble Supreme Court in CCE v. Venus Casting (P) Ltd. - 2000 (117) E.L.T. 273 (S.C.) , but this decision is given only on the subject of determination of production capacity of a mill unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained elsewhere in these rules, a manufacturer may, in the beginning of each month from 1st day of September, 1997 to the 31st day of March, 1998 or any other financial year, as the case may be, and latest by the tenth of each month, pay a sum equivalent to one-twelfth of the amount calculated at the rate of ₹ 300/- multiplied by the annual capacity in metric tonnes, as determined under sub rule (3) of Rule 3 of the Hot Rerolling Mills Annual Capacity Determination Rules, 1997, and the amount so paid shall be deemed to be full and final discharge of his duty liability for the period from the 1 st day of September, 1997 to the 31 st day of March, 1998, or any other financial year, as the case may be, subject to the condition that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed, to pay proportionately less duty in case the factory and production is closed for a continuous period exceeding seven days. Sub-Section 4 makes a provision for relaxation in the duty payable assessed on the basis of annual production capacity, if the factory and production is never closed down, but ultimate production is less than annual production capacity determined under sub-section (2). 5. Coming back to Rule 96ZP(3), terminal clause of the same clearly indicates that those manufacturers, who are enjoying benefit of the scheme of payment of one twelfth of the duty payable on the basis of annual production capacity determined, are required to pay the duty at the rate of ₹ 300/- per tonne, as against ₹ 400/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons under the Rules 96ZO, ZP, and ZQ of the Central Excise Rules, 1994 are invalid for the reasons assigned in the judgment. Accordingly, the appeals filed by the Revenue are dismissed and the appeals filed by the assessees are allowed to the extent indicated above. It may be noted that in an appeal from a judgment of the Allahabad High Court dated 8-11-2012 in SLP (C) No. 9796/2013, it has been held that the levy of penalty under the aforesaid provisions is mandatory in character. In view of what has been held by us today, this appeal will also have to be allowed in the same terms as the other assessee's appeals which have been allowed. All the aforesaid appeals are disposed of accordingly. In view of that no penalty can be impose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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