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2016 (1) TMI 434 - AT - Central ExciseDetermination of duty on the basis of Annual Production Capacity under Section 3A - fixation of the capacity of the Furnace - appellant contended that the capacity has been determined incorrectly and also on the grounds that with omission of the section 3A of the Central Excise Act, without any saving clause, the proceedings initiated under the said section cannot continue and would lapse. - Held that - In the instant case the SCN has been issued prior to 1.3.2001, the capacity has not been finalized till date. The last adjudication order has been issued on 9.12.2005, which is much after the omission of Section 3A. It is seen that the facts of this case are identical to the facts in the case of M/s Alwar Processors Pvt. Ltd. 2014 (12) TMI 156 - CESTAT NEW DELHI No strong arguments or facts have been presented to differ from the case. Respectfully agreeing with decision of the co-ordinate Bench in the case of M/s Alwar Processors Pvt, Ltd, being identical matter, we allow the appeal. The proceedings initiated in the letter of Commissioner dated 14.11.1998 for fixation of capacity different from the declaration originally filed by appellants would lapse, since the same has not been finalized before omission of Section 3A. - Decided in favor of assessee.
Issues Involved:
1. Determination of capacity under Section 3A of the Central Excise Act. 2. Survival of proceedings initiated under Rule 96ZO after the omission of Section 3A. Issue 1: Determination of capacity under Section 3A of the Central Excise Act: The case involves M/s Vikas Metroll (P) Ltd., challenging the capacity determination under Section 3A of the Central Excise Act for their steel products manufacturing using an induction furnace. The Commissioner provisionally fixed the capacity in 1998, leading to a series of challenges by the appellant. The Tribunal remanded the matter twice, with subsequent orders from the Commissioner and the Supreme Court's involvement. The appellant contested the capacity determination, arguing for assessment on actual production basis. The Tribunal, in September 2001, remanded the matter again for capacity determination. The Commissioner re-determined the capacity in December 2005, leading to the current appeal against the capacity determination and the omission of Section 3A without a saving clause. Issue 2: Survival of proceedings initiated under Rule 96ZO after the omission of Section 3A: The key argument revolves around whether proceedings initiated under Rule 96ZO survive after the omission of Section 3A. The appellant asserted that after the omission of Section 3A, proceedings initiated under the Section and related Rules do not survive. Citing cases like M/s Alwar Processors Pvt. Ltd. and M/s Shiv Raj Wires Ltd., the appellant contended that similar proceedings have been set aside in identical circumstances. The learned Counsel highlighted discrepancies in capacity calculation and the application of volume calculation formulas. The respondent argued that the show cause notice and adjudication were done before the omission of Section 3A, supporting the findings of the order. The Tribunal, considering the High Court's judgment and previous decisions, concluded that proceedings initiated under Rule 96ZO would lapse after the omission of Section 3A. Referring to the case of M/s Alwar Processors Pvt. Ltd., the Tribunal found no merit in the Revenue's appeal and dismissed it. The proceedings initiated for capacity fixation different from the appellant's declaration were deemed to lapse due to non-finalization before the omission of Section 3A. The appeal was allowed, aligning with the decision in M/s Alwar Processors Pvt. Ltd. This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision based on legal precedents and interpretations of relevant laws and rules.
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