TMI Blog2018 (11) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 96ZO. If the conditions specified in the Rule 96ZO(3) are fulfilled an Assessee can opt for the flat rate specified in the said Rule. In the present case, the Tribunal has not considered the relevant legal position with reference to the facts and the scheme of Rule 96ZO(3) and Section 3A(4). The Tribunal has held that legal position stands concluded and only a factual enquiry is needed - matter remanded to the Tribunal - appeal allowed by way of remand. - Excise Appeal No. 34 Of 2008 - - - Dated:- 12-9-2018 - N.M. Jamdar Prithviraj K. Chavan, JJ. Ms. Asha Desai, Standing Counsel for the Appellant. Mr. Rajiva Srivastava, Advocate for the respondent. ORAL JUDGMENT : By this appeal, the Commissioner of Central Excise has challenged the order passed by the Customs and Excise Service Tax Appellate Tribunal, Mumbai. The Tribunal, by the impugned order has allowed the appeal filed by the Respondent Assessee and has remanded the matter to the Commissioner (Appeals). 2. The Respondent Assessee, Global Ispat Ltd., has a unit Senior at Cuncolim Industrial Estate, Salcete Goa. The Respondent Assessee was engaged in manufacturing of mild steel ingots. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law: Whether provisions of Section 3A requiring determination of annual capacity of production are relevant for the purpose of the assessee who is paying excise duty under Rule 96ZO(3) based upon furnace capacity shall be the substantial question of law for adjudication? 5. The two provisions of the Act are relevant for consideration in this matter. First is the Section 3A of the Central Excise Act, 1944. The Section has been inserted by way of amendment notified in the year 1997. Section 3A reads thus : 3A Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. - (1) Notwithstanding anything contained in section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it 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 accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the notified goods shall be deemed to be the duty of excise leviable on such goods under the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), read with any notification for the time being in force. Explanation 2. -For the purposes of this section, the expression hundred per cent. export-oriented undertaking shall have the meaning assigned to it in section 3. 6. Section 3A refers to power of the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. It empowers the State to issue a notification having regard to the nature of the process of manufacturing or production of excisable goods of any specified description having regard to such other factors as may be relevant and to safeguard the interest of the Revenue. Section 3A(2) provides for determination of the annual capacity of production, or such factors or factors relevant to the annual capacity of production by specifying so in Rules. 7. The second provision which is of relevance is Rule 96ZO(3) of the Central Excise Rules, which reads thus : 96ZO. Procedure to be followed by the manufacturer of Ingots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge in total capacity, the manufacturer shall pay amount calculating pro rata. 9. Therefore the Act and Rules provides for two modes of payment of Excise. First as per Section 3A pro rata, and second a fixed payment as per Rule 96ZO. If the conditions specified in the Rule 96ZO(3) are fulfilled an Assessee can opt for the flat rate specified in the said Rule. 10. It is not in dispute that the Assessee had opted for the payment at flat rate under Rule 96ZO(3). It is also not in dispute that the Assessee did not pay the amount of ₹ 5,83,000/- per month, the fixed amount, for the relevant period. Since the amount of ₹ 5,83,000 was not paid for the relevant assessment period show cause notices have been issued. 11. It is the contention of the learned Standing Counsel of the Appellant that once the Assessee had opted for a fixed rate under Rule 96ZO(3), the Assessee is under obligation for the period for which the amount is so fixed, i.e. the relevant assessment year, and there cannot be any variation thereof. It was submitted that the unit of the Assessee has closed down on 24 September 1998, an intimation in respect of the same was given, and the Revenue has extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the order passed by the Commissioner and the order passed by the Tribunal. The Commissioner had passed a detailed order running into 60 pages. The Commissioner had referred to the earlier proceedings that the factual aspects in detail. Thereafter the Commissioner reproduced the statutory provisions and discussed the various judgments of the Tribunal and the Supreme Court. 14. The Tribunal in the impugned order has simply referred to its earlier order and observed that the order of the Commissioner has to be set aside because he has not adverted to the re-determination of the capacity based on the power situation i.e. power consumption. It noted that the Tribunal has passed an order in some other matter in the identical situations and the reference was made to the decisions which the learned Counsel for the Assessee, has cited before us. 15. We have gone through the decisions of the Supreme Court in the case of Venus Castings and Supreme Steels which have been placed before us by the Revenue. 16. In the case of Venus Castings, the issue arose before the Apex Court as the respondent-Assessee had availed of the procedure for payment of duty under the Act in terms of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee having exercised his desire of paying duty based on total furnace capacity the determination of annual capacity of production is not determined by the Revenue as the procedure adopted obviates determination of production. In the absence of determination of production the question of its determination on the basis of actual production as detailed in Section 3A(4) of the Act does not arise. 10. The schemes contained in Section 3A(4) of the Act and Rule 96ZO(3) or Rule 96ZP(3) of the Excise Rules are two alternative procedures to be adopted at the option of the assessee. Thus the two procedures do not clash with each other. If the assessee opts for procedure under Rule 96ZO(1) he may opt out of the procedure under Rule 96ZO(3) for a subsequent period and seek the determination of annual capacity of production. An assessee cannot have a hybrid procedure of combining the procedure under Rule 96ZO(1) to which Section 3A(4) of the Act is attracted. The claim by the respondents is a hybrid procedure of taking advantage of the payment of lumpsum on the basis of total furnace capacity and not on the basis of actual capacity of production. Such a procedure cannot be adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act which is specifically excluded. We find that the view taken by the Andhra Pradesh High Court in Sathavahana Steel Alloys (P) Ltd. vs. Government of India (supra) and the similar view expressed by the Division Bench of the Allahabad High Court in Civil Miscellaneous Writ Petition No. 1127 of 1999 M/s. Jalan Castings (P) Ltd. vs. Commissioner of Central Excise Ors. disposed of on February 28, 2000 is reasonable and correct. We overrule the view taken by the Allahabad High Court in Pravesh Castings (P) Ltd., Kanpur Nagar vs. Commissioner of Central Excise, Allahabad Anr. (supra). 17. In the case of the Supreme Steels again the provisions of Rule 96ZO and the newly added Section 3A of the Central Excise Act, 1944 had came up for consideration of the Supreme Court. The Supreme Court, in this case referred to the decision of in Venus Castings and held that the procedure under sub-section (4) of Section 3A of the Act and Rule 96ZO(3) of the Rules are alternate procedures and the Assessee has to opt for one. Having done so, it cannot claim the benefit of the other. 18. Both these decisions therefore referred to the very same statutory provisions which are inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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