2004 (4) TMI 129 - AT - Central Excise

Issues:
1. Challenge to the order demanding duty under Section 3A for a specific period.
2. Quashing of the order based on Supreme Court judgments.
3. Claim for scaling down the duty paid amount under Section 3A.
4. Allowance of Modvat on castings manufactured during a specific period.
5. Dispute regarding production figures provided by the appellants.
6. Decision on whether the appellants could be considered as manufacturers of notified goods under Section 3A.
7. Opting out of the scheme within the same financial year.
8. Apportionment of capacity used in the manufacture of non-notified goods.
9. Assessment of duty on steel castings not notified under Section 3A.
10. Confirmation of payment of duty demanded in the show cause notice.

Analysis:

1. The appellants challenged the order demanding duty under Section 3A for a specific period, arguing that the department ignored the production of castings and demanded duty on non-alloy steel ingots. They relied on Supreme Court judgments and claimed that the demand of duty beyond the furnace's production capacity was unlawful. The appellants also raised concerns about the order being based on assumptions and presumptions.

2. The appellants sought to quash the order citing Supreme Court judgments in support of their arguments. They claimed that the department did not consider their classification and Modvat declarations, and the order was passed without proper review or show cause notice. They emphasized the need for considering modvat entitlements and challenged the demand of duty under Section 3A without considering the show cause notice.

3. The appellants requested a scaling down of the duty paid amount under Section 3A by giving abatement for the capacity utilized for manufacturing castings. They also sought Modvat allowance on castings produced during a specific period.

4. The appellants disputed the production figures provided, but the authorities confirmed the accuracy of the figures. The appellants' grievance on this point was deemed baseless.

5. The decision revolved around whether the appellants could be considered manufacturers of notified goods under Section 3A. The authorities found that the appellants predominantly manufactured notified goods during a specific period, leading to the duty liability under Section 3A.

6. The issue of opting out of the scheme within the same financial year was addressed, with the Supreme Court's decision emphasizing that manufacturers of notified goods do not have the option to opt out within the same year. The appellants' choice to opt for the scheme and later opt out was noted.

7. The dispute over apportioning the capacity used in manufacturing non-notified goods was dismissed as the scheme under Section 3A did not allow for such adjustments. The option to pay duty based on actual production could only be exercised after the financial year's completion.

8. For steel castings not notified under Section 3A, duty assessment under regular procedure outside Section 3A was required. The appellants were directed to discharge the excise duty demanded on this production after availing modvat facility.

9. The order passed by the Commissioner was upheld, and the appeal was rejected since no other substantial issues were raised. The appellants were not required to make a specific duty payment due to the absence of a confirming order in the Commissioner's decision.

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