2015 (10) TMI 283 - AT - Central Excise

Determination of annual capacity - Declaration filed under Rule 96ZP (4) - Held that - It is clear from the perusal of records and as admitted in order-in-appeal dated 6.7.2000 the declaration filed by the appellant on 17.7.1998 is evidenced. Even in the impugned order of Ld. Commissioner (Appeals) he observed that declaration filed could not be traced by department and hence penalty cannot be imposed. It is also clear that the date declaration taken as 1.1.1999 by the ld. Commissioner is not correct and it is a mix up with the effective date of re-determination of ACP decided by the Tribunal. In the ex-parte order dated 21.1.2003 of original authority no specific discussion was found regarding date declaration or reason for confirmation of demand for the period prior to 1.1.1999. On appeal in the impugned order also no specific findings were recorded on these. The demands in show cause notices relating to the period prior to February, 1999 were issued on the ground that declaration was not filed by the appellant under Rule 96ZP. Since, the declaration dated 17.7.1998 filed by the appellant is not disputed, the duty liability has to be accordingly arrived at - The demands of duty made without reference to such declaration will not survive. - duty liability for this period is to be as per the declaration - Appeal disposed of.

Summary

Issues:
1. Determination of annual capacity of production under Rule 96 ZP of Central Excise Rules, 1944.
2. Imposition of duty liability and penalties under Rule 96 ZP and Rule 173Q.
3. Interpretation of the date for change in the parameter of production capacity.
4. Continuation of proceedings under compounded levy scheme after the omission of Section 3(A) of the Central Excise Act, 1944.

Analysis:

Issue 1: Determination of annual capacity of production under Rule 96 ZP
The appellants, manufacturers of hot re-rolled products of iron, had their annual capacity fixed multiple times by the authorities, leading to a series of appeals and remands. The Tribunal ultimately directed the change in the production capacity parameter to be effective from 1/1/1999.

Issue 2: Imposition of duty liability and penalties
Show cause notices were issued to the appellant for the period July 1998 to June 1999, based on discrepancies in the declaration under Rule 96 ZP (4) and the fixed annual capacity. The original authority confirmed the demands with penalties, which were later set aside by the Commissioner (Appeals) considering the effective date of the change in production capacity.

Issue 3: Interpretation of the date for change in production capacity
The appellant contested the Commissioner (Appeals) decision, arguing that the date of filing the declaration was different from the date for fixing the annual capacity of production. The Tribunal found discrepancies in the Commissioner's decision and clarified the correct dates to determine duty liability and penalties.

Issue 4: Continuation of proceedings under compounded levy scheme
The appellant raised concerns regarding the continuation of proceedings post the omission of Section 3(A) of the Central Excise Act, 1944. The Tribunal referenced a decision by the Madras High Court, affirming that the omission did not bar ongoing proceedings, thus allowing the Tribunal to proceed with the appeal analysis.

In conclusion, the Tribunal examined the merits of the appeals, rectified discrepancies in dates, and clarified the duty liability based on the declaration filed by the appellant. The appeals were disposed of accordingly, with penalties set aside considering the correct dates for determining duty liability.