2006 (3) TMI 486 - AT - Central Excise

Summary

Issues:
1. Determination of duty liability for non-payment during specific months.
2. Claim for re-determination of production capacity due to unit closure.
3. Applicability of Section 3A(2) for abatement during unit closure.
4. Interpretation of Rule 96ZP(3) in relation to payment of duty.
5. Obligation to pay duty even during unit closure until surrender of registration certificate.

Analysis:
1. Duty Liability Determination: The case involved a dispute over the duty liability determined by the Commissioner of Central Excise for specific months when the appellant did not pay the duty as per the fixed annual production capacity.

2. Production Capacity Re-determination: The appellant argued that the power supply to the unit was disconnected due to non-payment of dues, resulting in no production. They contended that the production capacity should have been re-determined under Section 3A(1) of the Central Excise Act, 1944.

3. Section 3A(2) Abatement Claim: The appellant alternatively claimed the benefit of Section 3A(2) during the period of unit closure, citing relevant case law and Tribunal decisions supporting abatement for closed units with necessary intimation.

4. Rule 96ZP(3) Interpretation: The Respondent argued that under Rule 96ZP(3), an assessee choosing to pay duty cannot claim benefits under Section 3A(3) and (4). They relied on case law emphasizing that once an assessee opts for a specific rule, they are bound by its conditions and cannot selectively avail of advantages.

5. Duty Payment During Unit Closure: The Tribunal analyzed previous decisions and concluded that duty liability must be discharged even during unit closure until the surrender of the registration certificate. Since the appellant did not surrender the certificate, duty payment was deemed necessary even for the closure period.

In the judgment, the Tribunal rejected the appeal, emphasizing that the appellant's reliance on certain decisions was misplaced as the circumstances differed. The Tribunal clarified that duty payment during unit closure is mandatory until the surrender of the registration certificate, as per the provisions of Rule 96ZP(3) and Section 3A(2). The judgment highlighted the importance of complying with duty obligations even in cases of unit closure without surrendering the registration certificate.