2008 (4) TMI 656 - AT - Central Excise

Summary

Issues:
1. Applicability of limitation provisions under Section 11A of the Central Excise Act to recovery of duty in arrears under a Compounded Levy Scheme.
2. Rejection of plea of time-bar.
3. Jurisdictional Assistant Commissioner's decision on opting out of the scheme.
4. Requirement of payment of interest on duty.

Analysis:

Issue 1: Applicability of limitation provisions under Section 11A
The appellants contested that a major part of the demanded duty was time-barred under Section 11A of the Central Excise Act. However, the Tribunal cited the case of Mohinder Steels Ltd. v. CCE, Chandigarh, where it was ruled that the limitation provisions of Section 11A do not apply to recovery of duty under a Compounded Levy Scheme. As the appellants were operating under such a scheme for Aluminium Circles, which had specific provisions for duty determination and recovery without any time-bar, the Tribunal found the plea of limitation untenable.

Issue 2: Rejection of plea of time-bar
The appellants' appeal primarily challenged the time-bar aspect of the differential duty demanded by lower authorities. The Tribunal upheld the decision of the appellate Commissioner, emphasizing the inapplicability of Section 11A limitations to duty recovery under the Compounded Levy Scheme for Aluminium Circles. Consequently, the plea of time-bar was dismissed, and the Tribunal found the decision of the appellate authority justified.

Issue 3: Jurisdictional Assistant Commissioner's decision on opting out of the scheme
The appellants had previously approached the Assistant Commissioner with a proposal to opt out of the Compounded Levy Scheme, which was rejected by the department. Although this proposal was not a ground of appeal, the appellants' counsel mentioned it during the hearing. The Tribunal referenced judgments in Commissioner v. Venus Castings (P) Ltd. and Union of India v. Supreme Steels and General Mills, supporting the Assistant Commissioner's decision to disallow switching from the Compounded Levy Scheme midway through a financial year. This decision was upheld based on established case law.

Issue 4: Requirement of payment of interest on duty
The appellants' counsel mentioned the requirement of interest payment on duty, but no records indicated any demand for interest by the authorities. Additionally, this aspect was not included in the grounds of appeal. Therefore, the Tribunal did not delve into the interest payment issue, as it was not substantiated in the records or raised as a formal challenge in the appeal. Ultimately, the impugned order was upheld, and the appeal was dismissed by the Tribunal.