2003 (9) TMI 192 - AT - Central Excise

Summary

Issues:
Duty liability under Section 3A(4) vis-a-vis Rule 96ZO(3) of the Rules.

Analysis:
The appeals involved in this judgment pertain to the duty liability of the appellants under Section 3A(4) in relation to Rule 96ZO(3) of the Rules. The Commissioner of Central Excise was directed by the Tribunal to determine the duty liability of the appellants under Section 3A(4) by considering their dates of options. However, the Commissioner held them liable to pay duty under Rule 96ZO(3) instead. The appellants argued that the Commissioner exceeded the scope of the remand order by not considering their options for payment of duty on actual production basis. The Department, on the other hand, contended that the appellants could not opt out of their initial choices under the compounded levy scheme. The Board's Circular regarding the application of Section 3A(4) to induction furnaces was also referenced.

The Tribunal found merit in the argument presented by the appellants. Prior to the impugned orders, the appellants were directed to pay duty based on the Determination of Annual Production Capacity under the compounded levy scheme. However, this order was set aside by the Tribunal, instructing the Commissioner to re-determine the duty liability under Section 3A(4) considering the appellants' options. The Commissioner, in contravention of the remand order, rejected the appellants' options for payment of duty on actual production basis. The Commissioner's interpretation that the appellants needed to opt out of Rule 96ZO(3) first before choosing Section 3A(4) was legally untenable. The appellants' clear expression of their choice to pay duty on actual production basis implied opting out of Rule 96ZO(3), as supported by the Board Circular.

The Tribunal highlighted that the Commissioner's actions went beyond the scope of the remand order, making the impugned orders unsustainable. The Apex Court's rulings emphasized that the appellants could opt for payment of duty under Section 3A(4) for subsequent financial years. The Commissioner's refusal to acknowledge the appellants' valid options and insistence on Rule 96ZO(3) was deemed illegal. Consequently, the Tribunal set aside the impugned orders in all appeals, granting relief to the appellants as permissible under the law.