2002 (2) TMI 133 - HC - Central Excise

Summary

Issues involved: Challenge to excise department's stand on compounded levy scheme operation for Central Excise based on manufacturing capacity from 1-5-2001 to 31-3-2002.

Summary:
1. The petitioners challenged the excise department's interpretation of the compounded levy scheme for Central Excise from 1-5-2001 to 31-3-2002, based on manufacturing capacity.

2. The compounded levy scheme, introduced by Notification No. 16/01-C.E. (N.T.) on 30-4-2001, required a prescribed application and certification of investment in plant and machinery below the ceiling of Rs. 3 crores. The petitioner's application was supported by a Chartered Accountant's certificate as per accounting standards.

3. The respondents issued a show cause notice stating a higher value of plant and machinery, leading to a personal hearing where the petitioner contested the valuation. However, the Commissioner concluded that the petitioner exceeded the Rs. 3 crores limit based on subsequent notifications.

4. The petitioner argued that their application was made before the subsequent notification and should be assessed based on the rules applicable at the time. The respondents contended that the petitioner had the opportunity to present their case and should have pursued the alternative appeal remedy.

5. The Court found that the Chartered Accountant's certificate was undisputed and met the scheme's requirements, regardless of subsequent notifications. The expert opinion prevailed over the Deputy Commissioner's valuation, leading to the allowance of the petitions and setting aside of the orders against the petitioner.

6. The Court directed the respondents to levy and collect duty as per the compounded levy scheme for the specified period, emphasizing the importance of the expert opinion in determining compliance with the scheme's rules.