2013 (12) TMI 869 - AT - Central Excise

Short payment of duty Benefit of Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 read with Rule 96ZO(3) of the Central Excise Rules, 1944 Waiver fo pre-deposit - Held that - The appellant did not file any appeal, the Department initiated recovery proceedings, against which the appellant went to the High Court pleading that they have not received the order passed by the Assistant Commissioner and subsequently on directions of the Hon ble Rajasthan High Court, the appeal filed by the appellant before the Commissioner (Appeals) was considered and the same was decided vide order-in-appeal dated 6-8-2012 - this is a case where the proceedings for confirmation of duty demand had been concluded much before the repeal of Section 3A and as such the duty demand would not be effected by the repeal of Section 3A w.e.f. 11-5-2001 - the appellant have not been able to establish prima facie case the appellant is directed to deposit entire duty Stay not granted.

Summary

Issues:
1. Applicability of duty demand under Compounded Levy Scheme.
2. Repeal of Section 3A of the Central Excise Act, 1944.
3. Validity of duty demand post-repeal.
4. Stay application for waiver of pre-deposit.

Analysis:

Issue 1: Applicability of duty demand under Compounded Levy Scheme
The appellant, a manufacturer of MS Ingots, operated under the Compounded Levy Scheme. The duty demand of Rs. 49,663/- was confirmed by the Assistant Commissioner for short payment during Jan. 98 to May 1998. The Commissioner (Appeals) upheld this duty demand in the order-in-appeal dated 31-8-2012.

Issue 2: Repeal of Section 3A of the Central Excise Act, 1944
The appellant argued that the duty demand was not sustainable post the repeal of Section 3A without a saving clause w.e.f. 11-5-2001. They relied on the judgment of the Hon'ble Gujarat High Court in Krishna Processors v. Union of India, which stated that proceedings concluded after the omission of Section 3A would not survive. The appellant sought waiver of the pre-deposit of duty demand for the appeal.

Issue 3: Validity of duty demand post-repeal
The Departmental Representative opposed the stay application, emphasizing that the duty demand proceedings were concluded in 2000, before the repeal of Section 3A in 2001. The Tribunal noted that the proceedings for the duty demand were completed before the repeal, making the judgment of the Hon'ble Gujarat High Court inapplicable. The appellant was directed to deposit the entire duty amount for the appeal.

Issue 4: Stay application for waiver of pre-deposit
The Tribunal considered arguments from both sides and observed that the duty demand proceedings were finalized before the repeal of Section 3A, indicating that the duty demand would not be affected by the repeal. The appellant was directed to deposit the entire duty amount within four weeks for the appeal to be heard, with compliance due by 3-4-2013.

This detailed analysis covers the issues of the applicability of duty demand under the Compounded Levy Scheme, the repeal of Section 3A, the validity of duty demand post-repeal, and the stay application for waiver of pre-deposit in the given legal judgment.