2005 (4) TMI 466 - AT - Central Excise

Summary

Issues:
1. Challenge against two orders passed by the Commissioner of Central Excise (Appeals) in a single appeal.
2. Determination of Annual Capacity of Production (ACP) and duty liability.
3. Imposition of penalties under Rule 96ZP (3) and Rule 173Q.
4. Revision of ACP and its retrospective effect on duty payments.
5. Appeal against the vacating of penalties by the Commissioner (Appeals).

Analysis:
1. The appeal before the Appellate Tribunal challenged the Commissioner of Central Excise (Appeals) orders, specifically Order-in-Appeal No. 4/2004 and another order of the same year. The Tribunal noted that the Revenue should have filed separate appeals against the two Orders-in-Appeal instead of challenging both in one appeal. Consequently, the present appeal was entertained against Order-in-Appeal No. 4/2004.

2. The case involved the determination of the Annual Capacity of Production (ACP) by the Commissioner of Central Excise, leading to the fixation of the monthly duty liability for the respondents. The assessee, however, calculated and paid duty differently for a specific period. Subsequently, a show-cause notice was issued for the differential duty and penalty. The Joint Commissioner adjudicated the dispute, adjusting earlier excess duty payments towards the differential duty demand and imposing penalties under Rule 96ZP (3) and Rule 173Q. The Commissioner (Appeals) allowed the assessee's appeal against penalties while dismissing the Revenue's appeal.

3. The main challenge in the appeal was against the vacating of penalties by the Commissioner (Appeals). The Tribunal analyzed the reasoning behind the penalties' vacation, as stated in the impugned order. It was noted that since the ACP was revised retrospectively, the payments made by the assessee were provisional until the revision date. As there was no delay in payment of duty, the penalties under Rule 96ZP (3) and Rule 173Q were rightly vacated by the Commissioner (Appeals).

4. The revision of the Annual Capacity of Production (ACP) was crucial in this case, as it impacted the duty payments made by the assessee. The original ACP determination was revised retrospectively, making the payments made before the revision date provisional. The Tribunal upheld the Commissioner (Appeals)' decision that the adjustments made towards the duty demand were considered as due payments, eliminating the need for penalties due to the absence of delayed payments.

5. Consequently, the Tribunal rejected the appeal by the Revenue against the order of the Commissioner (Appeals) vacating the penalties. The Tribunal affirmed the Commissioner (Appeals)' reasoning that in the absence of delayed duty payments, the penalties under Rule 96ZP (3) and Rule 173Q were rightly vacated. The order of the Commissioner (Appeals) was upheld, and the appeal by the Revenue was dismissed.