2015 (6) TMI 1047 - AT - Central Excise

Eligibility for abatement - sub-rule (2) of Rule 96ZP - factory of the respondent was closed during the period from 28.06.1997 to 12.10.1997 - before re-start of production, the respondent on 10.10.1997 exercised option to operate under Rule 96ZP (3) - Demand of duty as determined, w.e.f. 1st September, 1997 - Held that - it is clearly borne out from the records that the respondent had intimated the option for availing of the Scheme on 10.10.1997 under Rule 96ZP (3) of Central Excise Rules, 1944. Therefore, duty is payable under the said sub-rule (3) only with effect from 10.10.1997. In respect of the period 28.06.1997 to 12.10.1997 as the factory was closed, the respondent is eligible for abatement under sub-rule (2) of Rule 96 ZP, as rightly held by the Commissioner in the impugned order. - Decided against the revenue

Summary

Issues:
- Interpretation of Rule 96 ZP of Central Excise Rules, 1944 regarding duty liability on hot rolled products of non-alloy steel.
- Applicability of abatement under sub-rule (2) of Rule 96 ZP during factory closure.
- Jurisdiction of Commissioner to determine duty liability and annual capacity of production.
- Effect of prior decisions on subsequent adjudication orders.

Analysis:
1. Interpretation of Rule 96 ZP: The case involved the interpretation of Rule 96 ZP of the Central Excise Rules, 1944, specifically related to the duty liability on hot rolled products of non-alloy steel. The rule required manufacturers to pay duty based on the annual production capacity determined by the Commissioner. Sub-rules (1), (2), and (3) of Rule 96 ZP outlined the payment options and abatement provisions based on factory operations and closures.

2. Abatement during Factory Closure: The issue of abatement under sub-rule (2) of Rule 96 ZP arose when the respondent's factory was closed for a period. The respondent claimed abatement for the closure period and opted to operate under sub-rule (3) of Rule 96 ZP upon reopening. The Commissioner initially demanded duty payment but later abated the duty liability for the closure period in the final determination of annual capacity, which was challenged by the Revenue.

3. Jurisdiction of Commissioner: The jurisdictional Commissioner had provisionally determined the annual production capacity and demanded duty payment pending verification. The Commissioner's subsequent final determination of annual capacity and duty liability was challenged by the Revenue on the grounds of prior decisions and jurisdictional limits. The Tribunal analyzed the Commissioner's authority to determine duty liability and annual capacity based on the representations and documentary evidence provided.

4. Effect of Prior Decisions: The Revenue contended that prior decisions by the Commissioner (Appeals) should impact the subsequent adjudication order. However, the Tribunal clarified that the issues adjudicated by the Commissioner (Appeals) were distinct from those addressed in the final determination of annual capacity. The Tribunal emphasized the need to consider each issue independently based on the relevant legal provisions and factual circumstances.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, upholding the Commissioner's decision to abate the duty liability for the closure period and determine the final annual capacity based on the representations and options exercised by the respondent. The judgment emphasized the importance of interpreting the rules accurately, considering factory operations, and ensuring proper jurisdictional authority in determining duty liabilities.