2003 (8) TMI 459 - AT - Central Excise

Summary

Issues:
Challenge to duty demand at compounded rates and request for levy of duty based on actual production under Notification No. 23/97-C.E. (N.T.) and 30/97, dated 1-8-97.

Analysis:
The appellant, a manufacturer of M/s. Ingots, contests the duty demand at compounded rates and seeks duty based on actual production, arguing that the levy and rate prescribed in the Central Excise Tariff Act is mandatory for goods of Chapter 72. The appellant did not opt for payment of duty under Rule 96ZO(3).

The Revenue asserts that the appellant paid duty under Rule 96ZO(3) as per the Compounded Levy Scheme, which precludes re-fixation of duty liability under Section 3A of the Central Excise Act, citing the decision in Commissioner v. Venus Castings. The Apex Court held that once an assessee opts for duty payment under Rule 96ZO(3), they cannot change during the financial year.

The Tribunal notes that the Compounded Levy Scheme is an alternative method for duty collection, overriding Section 3. The Supreme Court upheld the levy of duty on a compounded basis in previous cases. The legal provision in Section 3A dictates that duty for goods specified under it must be based on production capacity, not actual production.

The appellant's demand for duty based on actual production contradicts the scheme of compounded levy upheld by the Apex Court. The appellant's contention of not opting for Rule 96ZO(3) is dismissed as they made payments under that rule and consistently sought duty collection contrary to the compounded scheme.

The Tribunal refers to the appellant's letter highlighting challenges in production due to various factors, noting that the Compounded Levy Scheme did not consider these aspects in determining annual production capacity. Consequently, the appeal lacks legal merit and is dismissed.