2012 (10) TMI 107 - AT - Central Excise

Demand of duty - benefit of said Notification No. 34/2001-C.E. required procedures not followed by assessee Held that - Assistant Commissioner or Deputy Commissioner can allow the benefit of the Notification, even if the procedure is not followed - appellant was not paying any duty on the aluminium circles under the bona fide belief that such circles, emerging at intermediatory stage, were not leviable to duty. On being pointed out, they paid the duty as per the directions of the Superintendent in terms of Notification No. 34/2001-C.E.. - it is fit case where the Assistant Commissioner or Deputy Commissioner should have ordered for payment of duty in terms of the said notification, even if detailed procedure was not followed by the appellant stay allowed

Summary

Issues:
1. Applicability of Notification No. 10/2006-C.E. dated 1-3-2006 exempting duty on aluminium utensils.
2. Discharge of duty liability on aluminium circles under Notification No. 34/2001-C.E.
3. Allegation of non-compliance with Notification No. 34/2001-C.E. and imposition of duty under Notification No. 6/2002-C.E.
4. Jurisdictional authorities' advice on duty payment under Notification No. 34/2001-C.E.
5. Procedure for availing benefit under Notification No. 34/2001-C.E. and authority's discretion in allowing non-compliance.

Analysis:

The appellants, engaged in manufacturing aluminium utensils, faced a dispute regarding the duty liability on aluminium circles produced during manufacturing. The Revenue believed that these circles were excisable goods attracting duty. The officers initially advised the appellants to discharge duty liability on aluminium circles under Notification No. 34/2001-C.E. by paying Rs. 10,000 per month. The appellants complied and deposited Rs. 3,40,000 for the specified period. However, a show cause notice later alleged non-applicability of the said notification due to procedural non-compliance, demanding duty under Notification No. 6/2002-C.E. The Joint Commissioner upheld the demand and penalties, leading to the present stay petition.

At the prima facie stage, it was noted that duty was attracted under two different notifications, creating confusion. The authorities initially allowed duty payment under Notification No. 34/2001-C.E., which the appellants followed. Subsequently, the authorities changed their stance due to procedural lapses. The procedure under the notification required an application to the Jurisdictional Superintendent, and failure to follow it could preclude the benefit for a specified period. However, the Assistant Commissioner or Deputy Commissioner had discretion to allow the benefit even in non-compliance cases. In this case, the appellants paid duty based on the Superintendent's direction, believing the circles were not dutiable. Therefore, it was deemed a fit case for the Assistant Commissioner or Deputy Commissioner to order duty payment under the said notification, even with procedural lapses. Consequently, the stay petition was unconditionally allowed.