2006 (11) TMI 226 - HC - Central Excise

Summary

Issues involved:
The issue involved in this case is whether an assessee working under the Compounded Levy Scheme is liable to pay duty on goods manufactured on job work, in addition to the duty determined under the Compounded Levy Scheme.

Details of the judgment:
The assessee in this case was engaged in manufacturing non-alloy steel and rounds from billets on a job work basis. The assessee was paying fixed duty under the Compounded Levy Scheme u/s 3A of the Central Excise Act, 1944, assessed based on the capacity of the assessee. The adjudicating authority issued a show cause notice questioning why the assessee should not pay duty for the work done on a job work basis, in addition to the fixed duty paid based on annual capacity. The Commissioner of Income Tax (Appeals) set aside the order of the adjudicating authority, stating that the assessee was not entitled to the benefit of a specific notification.

The assessee appealed before the Tribunal, clarifying that they were not seeking the benefit of the said notification but contending that no further duty was payable as they had already paid duty as per the annual capacity determined under Section 3A of the Act. The Tribunal considered the provisions of Section 3A of the Act, which provide for the determination of annual capacity of production for levy of excise duty. The Tribunal noted that once the annual capacity had been determined and duty paid accordingly, there was no provision for demanding further duty based on job work done by the assessee.

The Court concluded that since the assessee had duly determined the annual capacity and paid duty accordingly, there was no legal basis for demanding further duty due to job work done by the assessee. It was held that no substantial question of law arose for consideration, and the appeal was dismissed.