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2015 (12) TMI 1444 - AT - Central ExciseDuty demand - Determination of annual capacity of production - Demand of differential duty - penalty under Rule 96ZP (3) - Held that - No case of deliberate default is made out against the appellant. I also hold that the differential duty became payable only on pronouncement of the order of the Hon ble Supreme Court dated 06.07.2011. It is admitted fact that the appellant paid the differential duty (50% was paid during pendency of appeal and the balance was paid soon after passing of the OIO). Thus, there is no deliberate delay on the part of the appellant. In this view of the matter, I hold that the appellant would be liable to interest w.e.f. 30th day of service of OIO on the amount of duty paid belatedly, if any. Such interest, shall be calculated by the adjudicating authority and intimated to the appellant. The appellant is also at liberty to calculate the interest payable, if any, in terms of this order and filed the same for approval of the adjudicating authority - Decided partly in favour of assessee.
Issues:
1. Capacity determination under Section 3A and Notification 32/97-CE. 2. Interpretation of Rule 3(3), Rule 4(2), and Rule 5 regarding annual capacity determination. 3. Dispute over imposition of penalty and interest under Rule 96ZP (3) of the Central Excise Rules, 1944. 4. Effect of deletion of Section 3A by Act 14(1), 2001 on pending proceedings. 5. Applicability of interest and penalty on the appellant. 6. Judicial decisions on similar cases and their impact on the present case. Issue 1: Capacity determination under Section 3A and Notification 32/97-CE: The appellant, engaged in manufacturing M.S. Strips, filed declarations under the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997. The Annual Capacity of Production (ACP) was initially fixed at 7368 MT, later revised to 2180 MT. However, Rule 5 dictated that ACP should be equal to actual production if higher. Previous tribunal decisions favored the appellant's re-determined capacity over actual production for 1996-97. Issue 2: Interpretation of Rule 3(3), Rule 4(2), and Rule 5 regarding annual capacity determination: The Hon'ble Supreme Court ruled that ACP should be based on the formula in Rule 3(3) and referred to in Rule 5, favoring the Revenue when actual production exceeded ACP determined under Rule 3(3) and Rule 4(2). Issue 3: Dispute over imposition of penalty and interest under Rule 96ZP (3) of the Central Excise Rules, 1944: The Revenue demanded differential duty, penalty, and interest based on show-cause notices issued during the pending adjudication/appeals. The appellant contested the penalty and interest, leading to an appeal before the Commissioner (Appeals) who confirmed the original order. Issue 4: Effect of deletion of Section 3A by Act 14(1), 2001 on pending proceedings: The appellant argued that the deletion of Section 3A without a saving clause rendered pending proceedings abated, citing judicial precedents supporting this view. Issue 5: Applicability of interest and penalty on the appellant: The appellant's counsel contended that no penalty should be imposed post the Supreme Court's decision, and interest was not applicable due to the deletion of Section 3A without a saving clause. Issue 6: Judicial decisions on similar cases and their impact on the present case: The Tribunal considered previous favorable orders for the appellant, the High Court's ruling, and the Supreme Court's decision in similar cases. The Tribunal found no deliberate default by the appellant, setting aside the penalty and allowing interest on the belatedly paid duty amount. In conclusion, the Tribunal partially allowed the appeal, setting aside the penalty and requiring interest calculation on the belatedly paid duty amount.
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