2002 (1) TMI 571 - AT - Central Excise

Summary

Issues: Application for modified Compounded Levy Scheme rejected by Commissioner based on the presence of an open air stenter in the factory as on 1-5-2001.

Analysis:
The appellants, engaged in fabric manufacture, applied for the modified Compounded Levy Scheme under Rule 96ZNA from 1-5-2001 after working under the erstwhile scheme. The Commissioner rejected their application citing the presence of an open air stenter for heat-setting/drying in their factory on 1-5-2001, making the Scheme inapplicable as per Explanation (ii) to Rule 96ZNA. The appeal challenges this decision.

The appellant's advocate argued that the open air stenter, leased until 30-4-2001, was not capable of heat-setting/drying and was removed thereafter. They submitted a revised plan showing only a hot air stenter, approved on 8-5-2001. The advocate contended that the Commissioner acknowledged the absence of an open air stenter from 8-5-2001, requesting approval from that date until 31-3-2002, agreeing to pay duty for the period 1-5-2001 to 7-5-2001 based on actual production.

The Respondent's representative opposed the request, citing Rule 96ZNA's language to argue against the appellant's eligibility due to the open air stenter's presence on 1-5-2001. The Commissioner's findings were supported, urging the appeal's rejection.

Upon review, it was noted that the Commissioner acknowledged the absence of the open air stenter from 8-5-2001 onwards. The argument that Rule 96ZNA prohibited granting the application post-1-5-2001 was dismissed. The appellants' commitment to pay duty for 1-5-2001 to 7-5-2001 based on actual production was accepted. Consequently, the application submitted on 18-5-2001 was approved for the period 8-5-2001 to 31-3-2002, leading to the allowance of the appeal.