2006 (11) TMI 527 - AT - Central Excise

Summary

Issues:
1. Challenge to determination of annual duty liability under Compounded Levy Scheme.
2. Appeal against demands raised in Show Cause Notice.
3. Request for remand for redetermination of assessment.
4. Omission of Section 3A of the Central Excise Act without a saving clause.

Analysis:

1. The appellants, manufacturers of CTD Bars and Rods, were under the Compounded Levy Scheme per Section 3A of the Central Excise Act, 1944. The Commissioner of Central Excise determined duty liabilities for the years 1997-98 and 1998-99 at Rs. 14,17,733 and Rs. 24,30,400 respectively. The appellants opted to pay Rs. 400 per MT as per Rule 96ZP(1) of the Central Excise Rules. Subsequently, a Show Cause Notice was issued by the Jurisdictional Range Officer demanding duty short paid for both financial years, which was confirmed by the Adjudicating Authority. The appellants, after rejection by the Commissioner (Appeals), approached the Tribunal seeking relief.

2. The learned Consultant argued that although they did not challenge the determination of annual duty initially, they contested the assessments on annual capacity before the authorities. However, their challenge was dismissed as they had not challenged the assessment order under Section 3A of the Act along with relevant rules. The Consultant submitted applications with documents to contest the assessment order and requested a remand for a fresh determination.

3. The JCDR contended that since the appellants did not challenge the order of annual capacity determination as per Section 3A of the Act and related rules, they could not seek a remand for reassessment. Consequently, the Show Cause Notice led to the confirmation of demands raised.

4. The Tribunal, after careful consideration, noted the omission of Section 3A of the Central Excise Act by the Parliament without a saving clause. Referring to precedents, including the Mumbai Bench Order in the case of Mitra Steel & Alloys Pvt. Ltd., it was observed that demands in similar cases were set aside due to the absence of a saving clause. Rulings in cases like Kundil Alloys Pvt. Ltd. v. CCE, Goa and Bannari Amman Steels (P) Ltd. & Others were followed, leading to the setting aside of demands in the present case. Consequently, the Tribunal allowed the appeal, setting aside the impugned orders based on the cited judgments.

In conclusion, the Tribunal set aside the demands raised against the appellants by following established precedents due to the omission of Section 3A of the Central Excise Act without a saving clause, ultimately granting relief to the appellants.