2005 (1) TMI 490 - AT - Central Excise

Summary

Issues involved:
1. Interpretation of compound levy system and duty payment regulations under Rule 96ZP(1).
2. Application of Board's Circular dated 31st March, 2000 to goods manufactured and cleared from the factory.
3. Validity of the Commissioner's order and its compliance with the law and regulations.

Analysis:
1. The primary issue in this case revolves around the interpretation of the compound levy system and duty payment regulations under Rule 96ZP(1). The appellant argued that they were under the compound levy system until 31st March, 2000, paying duty at the rate of Rs. 400 per M.T. The appellant contended that goods manufactured up to this date should be regulated by the compound levy system, allowing clearance from the factory upon payment of the specified duty. The appellant emphasized the clarity of the law and pointed out an apparent error in the Commissioner's order. The Tribunal acknowledged the appellant's prima facie case, waiving the pre-deposit condition and proceeding with the appeal.

2. Another crucial aspect of the case involved the application of the Board's Circular dated 31st March, 2000, to the goods manufactured and cleared from the factory. Both parties referenced the Circular, which clarified that goods manufactured and finished goods in the factory could be cleared without duty payment if duty had been previously paid under Rule 96ZO(3) or 96ZP(3). This instruction was deemed applicable to goods cleared under Rule 96ZP(1) as well. The Tribunal concurred with this interpretation, emphasizing the clarity of the law and the Circular. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, providing consequential relief.

3. Lastly, the validity of the Commissioner's order was scrutinized in light of the law and regulations governing duty payment and the compound levy system. The Tribunal found the Commissioner's order to be erroneous based on the established legal framework and the Board's Circular. As a result, the impugned order was overturned, and the appeal was granted in favor of the appellant, with associated relief provided. The stay petition was also disposed of in light of the appeal decision.