2002 (4) TMI 175 - AT - Central Excise

Summary

Issues:
Dispute over duty liability under Central Excise Act based on annual production capacity determination.

Analysis:
The appeals and stay petitions were taken up together as they involved the same issue of duty liability under the Central Excise Act. The appellants, engaged in manufacturing MS Ingot or re-rolled products, disputed the duty chargeable on their goods based on the annual production capacity determined by the Commissioner. The Commissioner insisted on duty payment under specific rules despite the appellants' claim that their duty liability should be re-determined in accordance with Section 3A(4) of the Act. The authorities below confirmed the duty demand and imposed penalties, leading to the appeals.

During the hearing, the appellants argued against paying duty based on the ACP fixed by the Commissioner, advocating for duty payment on actual production basis. They contended that denying them this benefit would be unjust, citing relevant case law. The Revenue, on the other hand, emphasized the rules formulated under Section 3A to combat clandestine activities. The Tribunal carefully considered the submissions, case law, and facts on record, noting that the appellants did not opt for duty payment under specific rules but were paying duty under different provisions.

The Tribunal distinguished the present case from the precedent cited, emphasizing that the appellants had not chosen to pay duty under the rules in question. Referring to Section 3A(4) and (5) of the Act, the Tribunal highlighted the provisions allowing duty payment based on actual production if lower than the determined capacity. It clarified that the appellants could claim this entitlement after the annual capacity of production is fixed. Consequently, the Tribunal set aside the impugned orders and remanded the matters to the concerned Commissioner for determining the duty liability under Sections 3A(4) and 3A(5) based on the appellants' claim of lower annual production, requiring substantiating evidence.

In conclusion, the appeals were allowed for remand to ascertain the duty liability in line with the provisions of Sections 3A(4) and 3A(5), with the appellants instructed to provide evidence of their lower annual production. The stay petitions were also disposed of accordingly.