2002 (6) TMI 119 - AT - Central Excise

Summary

Issues:
1. Duty liability under Section 3A of the Central Excise Act, 1944 after surrendering Registration Certificate.

Analysis:
The appeal involved the determination of duty liability under the Central Excise Act, 1944 for M/s. Digamber Foundry after surrendering their Registration Certificate. The Appellants had permanently closed their unit and surrendered the registration, with the Revenue initially dropping proceedings for demand of duty. However, the Commissioner (Appeals) held that duty liability existed for a specific period. The Appellants argued that once the Registration Certificate was surrendered, no duty was payable. The Appellants cited the case of Malviya Steel Ltd. v. CCE, Jaipur for the benefit of abatement during the period of closure of mills under Section 3A(2) of the Act.

The Revenue contended that duty was payable based on the annual production calculation for the Appellants. The Tribunal noted that during the relevant period, the factory was closed, the Registration Certificate was surrendered, and the Appellants were not manufacturing excisable products. The Revenue relied on the case of CCE v. Venus Castings Pvt. Ltd.

The Tribunal found that the issue was settled in the case of Malviya Steel Ltd., where it was held that the benefit of abatement from duty payment during the closure of the mill is available under Section 3A(2). The Tribunal clarified that the judgment in Venus Castings Pvt. Ltd. pertained to production capacity determination and did not preclude the abatement provision. Following the precedent, the Tribunal allowed the appeal filed by the Appellants, ruling in their favor.