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TMI Blog2023 (11) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Tariff and the period of dispute is from June 2015 to February 2016, during which the Appellant was discharging levy under erstwhile compounded levy scheme. 3. The scheme was captured under erstwhile Section 3A of the Central Excise Act, 1944, which had carved out Power of Central Government to charge Excise Duty on the basis of capacity of production in respect of notified goods. Under the scheme of Act, it was the onerous duty of the Appellant to file a declaration with regard to the parameters as provided in the rules and the notification carved out for determination of Annual Capacity of production of the factory by the Jurisdictional Assistant Commissioner, where such goods were produced, in accordance to the rates specified in the Chewing Tobacco Capacity Determination Rules. 4. The Annual Capacity of production was fixed on the basis of factors like the product, the speed of the machines, the retail sale prices, and whether or not production activity was in process or closed. It was mandatory levy for the Appellant to discharge the levy of Excise Duty on compounding basis and the Appellant could not have taken as a component of cost for fixing a price as ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carousal to final assessment, the case of the appellant that the discharge of levy of the CENVAT duty under compounding basis was a fixed duty which remained unrealized with respect to the quantity and value of the manufacture and hence was not recoverable from the buyers. The payment of duty in advance was mandatory. The learned Advocate further submits that the cenvatable invoices were not an instrument of taxation because the said duty is a 'Notional Duty' coupled with 'Notional Incidence' and the recovery was thereof not possible to be connected with the quantum of goods manufactured and sold under an invoice, which is corroborated by the fact that when clearance of the final product is made the cenvatable invoices is marked with indelible stamp "Discharge under compounding levy". He further submits that the learned Adjudicating Authority ought to have appreciated the fact that on ocular examination of the cenvatable invoice, it was not coming out that in spite of the advance discharge of the levy of the duty, there was no ground which could in any manner and probability show the recovery of tax from the customers or passing of the incidence to the buyer. The authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual production, which was the quarrel of the issue during the period in question and there are catena of decisions which define erstwhile Section 3A(4) of the Act, or actual production, and since with regard to the rolling mills it was an optional duty and as such the subjected case did not apply to the facts of the current case, and in this case with regard to the Chewing Tobacco determination Rules read with Section 3A of the Act, the Cenvat duty on compounding basis was mandatory, there was no option left for the Assessee but to adhere to, and abide, and follow the annual capacity of production, which has been determined by the Learned Assistant Commissioner and he also failed to appreciate the fact that the duty with regard to chewing Tobacco not being optional, as per the Rules, it carved out for advance payment of the duty running five days of the Calendar Month with regard to the production activity. 16. In support of his submissions he has relied upon the following decisions. (i) Kothi Steel Ltd. Vs. Commissioner of Central Excise, Vadodara, reported in 2004 (167) ELT 545 (Tri.- Bom.). (ii) Commissioner of Central Excise, Pune-I Vs. Sandvik Asia Ltd., reported in 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een challenged but the department is still depriving the company from having its legitimate refund of excise duty apparently on the basis of method of recording and disclosing transactions in the Audited Financial Statements. 22. We find that the company had to pay excise duty irrespective of sale/production under compounding scheme, therefore, it has correctly debited entire amount to profit and loss account. The refund amount constitutes the entitlement of the company on account of excess excised duty paid and mere change in nomenclature i.e. called pre-deposit or deposited under protest etc. does not change the essence of transaction. Under no circumstance compoundable excise duty can be shown anywhere else but as a reduction from Revenue from Operation. recovery of excise duty is not possible. 23. It is an established fact on record that the amount of refund i.e., Rs. 6,95,52,000/- was claimed by the Appellants only in the month of March 2022 after passing of the final order No. A/70062/2022-EX[DB] dated 02.02.2022 by the Tribunal, settling the issue of classification and consequent fixation of annual capacity of production and Appeal against which was already dismissed by Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants had no option but to bear the entire incidence of the duty, upon themselves and as the consequence the probability of their venture depends entirely on the functional efficiency of the machine and the number of machine installed in the factory, and virtually has no relation to the per unit price of the product. Therefore, the principle of the unjust enrichment, which is ordinarily applicable only on the goods manufactured and removed under the scheme of levy and more appropriately under Section 3 of the Act, the said principle cannot by any logically and economical be justifiable as legally tenable principle be extended to the manufactures working under compounded levy scheme under Section 3A. 28. Appellant relies upon the judgment in the matter of Commissioner of Central Excise, Ahmedabad-I Vs. Devi Synthetics, reported in 2010 (261) ELT 416 (Tri.- Ahmd), wherein it has been held as under: "M/s. Devi Synthetics, engaged in the manufacture of textiles fabrics, was discharging duty liability under the Compounded Levy in terms of annual capacity fixed under Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The refund claim filed by M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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