2009 (5) TMI 489 - AT - Central Excise

Production capacity based duty- Abatement of duty- Assessee is entitled for period for which unit remained closed as per report of jurisdictional range superintendent. However, they are not entitled to it for period before intimation of closure, especially when production commenced within days of closure. Erstwhile Section 3A of Central Excise Act, 1944. Demand- Excess paid duty and entitlement to abatement are required to be deducted from duty liability of assessment. Erstwhile Section 3A and Section 11A of Central Excise Act, 1944. Penalty- Failure to pay production capacity based duty. Ground that it was due to bonafide belief is insufficient to not impose penalty equal to duty under Rule 96ZO(3) of erstwhile.

Summary

Issues:
1. Duty payment under Compounded Levy Scheme for Non-Alloy Steel Ingots & Billets during 1997-2000.
2. Abatements claimed by the appellant for various periods.
3. Excess payment for August 1997 and penalty imposition under Rule 96(ZO)(3) of Central Excise Rules.

Analysis:
1. The case involved M Panchsheel Alloys Construction Pvt. Ltd. (PACPL) engaged in manufacturing Non-Alloy Steel Ingots & Billets under the Compounded Levy Scheme. The authorities alleged non-payment of duty for multiple periods between 1997-2000, issuing Show Cause Notices for each period. The Commissioner found discrepancies in duty payment and abatements claimed by PACPL, leading to a demand for unpaid duty and imposition of a penalty under Rule 96(ZO)(3) of Central Excise Rules.

2. Regarding the abatements claimed by PACPL, the Commissioner scrutinized the closure periods and found discrepancies in the claimed abatements. The tribunal, after hearing both sides, adjusted the abatements for different periods based on the factory closure reports. The tribunal allowed abatements for certain periods where the factory remained closed as per the jurisdictional range Superintendent's report, leading to a revision in the appellant's liability.

3. The tribunal noted an excess payment made by PACPL for August 1997 and recalculated the revised liability after adjusting the excess payment with the entitlement of abatements. The tribunal also considered the penalty imposition under Rule 96(ZO)(3) of Central Excise Rules. Citing the interpretation of the rule by the Apex Court in a previous case, the tribunal reduced the penalty imposed on PACPL to match the amount of duty short paid, resulting in a revised penalty amount.

In conclusion, the appeals filed by PACPL were partly allowed with adjustments made in duty liability, abatements, and penalty imposition based on the tribunal's findings and legal interpretations.