2002 (3) TMI 687 - AT - Central Excise

Summary

Issues:
1. Whether duty on incidentally manufactured goods in the factory working under Section 3A of the Central Excise Act, 1944 is chargeable at the normal rate of duty or covered under Rule 96ZO of Central Excise Rules.
2. If extra duty at the normal rate has been charged by the Department on incidentally manufactured goods, whether proportionate abatement is allowable based on the percentage of incidentally manufactured goods.

Analysis:

Issue 1:
The appellant contended that duty on non-alloy steel ingots should be paid under Section 3A and not under Section 3 of the Act, as clarified by CBEC Circular No. 325/42/97-CX. They argued that abatement should have been allowed in this case. However, the Revenue argued that duty deposited under Section 3A for the furnace used for manufacturing steel ingots does not cover duty paid on other alloy castings. The Circular clarified that the Compounded Levy Scheme applies to factories producing ingots and billets of non-alloy steel only. The duty was correctly discharged as per the formula under Section 3A, which does not provide for Modvat facility on products other than non-alloy steel. Refund is not admissible under Section 3A, and abatement is only available in case of unit closure. The Commissioner (Appeals) upheld the Revenue's position, rejecting the abatement claim.

Issue 2:
The appellant argued for the allowance of proportionate abatement if duty at the normal rate was extra charged on incidentally manufactured goods. The Revenue, however, maintained that no provision allows for such a refund claim under the Production Based Control Scheme. They emphasized that abatement is only permissible in case of unit closure. The Commissioner (Appeals) upheld the decision of the adjudicating authority, rejecting the appellant's appeal.

In the final judgment, the appellate tribunal, after considering the arguments from both sides and reviewing the records, found no legal infirmity in the decision of the Commissioner (Appeals). Consequently, the appeal was dismissed, upholding the rejection of the appellant's claims regarding duty payment and abatement under Section 3A of the Central Excise Act, 1944.