TMI Blog2017 (12) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3A, notwithstanding anything contained in section 3, the Central Government would have the power to notify certain goods to safeguard the interest of revenue on which duty would be leviable in accordance with the provisions of the said section - when the petitioners applied to the Commissioner on 24.4.1999 to enable them to pay the duty on actual production and not on ACP, prospectively, the Commissioner had to decide such applications and ordinarily, we see no reason why such applications had to be rejected. The Commissioner erred in not deciding such applications as well as in concluding that the petitioners and other manufactures did not have any such option. Order of the Commissioner therefore, must be set aside. The proceedings re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded levy scheme formulated under section 3A of the Central Excise Act. Under such provision, the excise department would levy duty on the basis of annual production capacity instead of actual production. However, subsection( 4) of section 3A gives an option to the manufacturer to apply for the determination of actual production on which basis the excise duty would be payable. It is undisputed that upon introduction of the said section with effect from 16.12.1998, initially the petitioners did opt for payment of duty on annual production capacity. However, the petitioners subsequently along with other manufactures challenged the very vires of section 3A of the Central Excise Act and simultaneously, prayed for the permission to opt for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction capacity and not on actual production basis. Since the petitioners had paid the duty on the basis of actual production, as per the show cause notice, there was a shortfall in the payment of duty. The petitioners were called upon to show cause why such differential duty with interest and penalty be not recovered. 6. Before the Commissioner in the reply as well as in the arguments, the petitioners raised the question of the application for being covered by actual production clause of subsection( 4) of section 3A, not being decided. The petitioners pointed out that such application was pending and remained pending through out. The Commissioner by the impugned order confirmed the basic duty demand but did not levy interest or penalty t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bre Boards Private Limited, Bangalore v. Commissioner of Income Tax, Bangalore reported in (2015) 10 Supreme Court Cases 333, held that even after repeal for the period during which the production remained, in the statute, duty can be levied. 8. On the other hand, learned counsel Shri Ankit Shah for the department opposed the petitions contending that the petitioners had initially applied for being covered by annual production capacity regime and had availed all the notifications issued under the said scheme. They could not have changed the option midway. 9. Section 3A of the Central Excise Act introduced with effect from 16.12.1998 pertained to the power of Central Government to charge excise duty on the basis of capacity of product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, the petitioners had applied on 24.4.1999. The Commissioner however, took no decision on such applications. Under the interim order by the High Court, the petitioners in the meantime continued to clear the goods upon payment of excise duty on actual production and clearance, The Commissioner was therefore, not correct in observing that that the manufactures had no option at the relevant time to pay the duty on the basis of actual production. He was perhaps hinting at the point that the petitioners having earlier opted for the duty under the annual production capacity, could not midway switch the option. In this context, the decision of Supreme Court in case of Bhuwalka Steel Industries Ltd. (supra), needs to be referred. In the said ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the question remains how frequently the assessee is entitled to exercise such an option; whether it is annual or monthly is a matter which requires a further examination. 11. Thus when the petitioners applied to the Commissioner on 24.4.1999 to enable them to pay the duty on actual production and not on ACP, prospectively, the Commissioner had to decide such applications and ordinarily, we see no reason why such applications had to be rejected. The Commissioner erred in not deciding such applications as well as in concluding that the petitioners and other manufactures did not have any such option. Order of the Commissioner therefore, must be set aside. 12.Ordinarily, we would have remanded the proceedings to the Commissioner fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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