2002 (1) TMI 1257 - AT - Central Excise

Summary

Issues:
1. Whether the applicant opted for determination of annual capacity of production or payment of duty on actual production.
2. Financial difficulties faced by the applicant.
3. Validity of the demand for differential duty.

Analysis:
1. The appellant's representative argued that the applicant never opted for determining the annual capacity of production but chose to pay duty based on actual production. Referring to specific letters, it was highlighted that the applicant consistently expressed the intention to pay duty on actual production rather than under Rule 96ZO(3). The representative emphasized that as per the Central Excise Act, the assessee must choose between paying duty on actual production or annual capacity, and in this case, the applicant always opted for actual production. Therefore, it was contended that no further demand should be imposed, and the pre-deposit of duty should be waived.

2. The appellant's representative also presented the financial difficulties faced by the applicant, showing a significant loss incurred during a specific financial year. It was argued that the applicant lacked sufficient funds to pay the duty, and considering the financial constraints, requested the waiver of the pre-deposit.

3. On the other hand, the respondent opposed the request, stating that the applicant had the opportunity to submit data for determining annual capacity but chose to pay duty based on the provisional determination of actual production. Referring to relevant court judgments, it was argued that once an option is exercised, it continues for the financial year. The respondent highlighted the applicant's sales turnover and available resources, suggesting that the demand for differential duty for a specific period was sustainable and should be upheld.

4. After considering the submissions and records, the Tribunal observed that the annual capacity of production was determined based on the applicant's data. It was noted that the applicant had opted out of Rule 96ZO(3) through specific letters. The Tribunal concluded that the determination of annual production capacity would apply for a certain period, and directed the applicant to deposit a specified amount by a set date. Failure to comply would result in the vacation of the stay and dismissal of the appeal.

5. The Tribunal emphasized that compliance with the directions was crucial to avoid adverse consequences, and in case of compliance, the matter would proceed for regular hearing on the scheduled date.