2016 (2) TMI 202 - AT - Central Excise

Duty liability - whether the finished goods i.e. bars and rods and ingots and billets lying in stock as on 1.8.99 is chargeable to duty at specific rate of duty as per the notification No.50/97 or standard rate of 16% advalorem? - Held that - Commissioner (Appeals) in his order has dealt the issue in detail and clearly brought out that appellants have failed to produce any evidence that stock of goods lying in appellant s factory were manufactured prior to 1.9.1997. Further, we find that Revenue s verification report as per the appellant s monthly returns filed for the months of July 97 and March 99 the closing stock of bars and rods and billets are less than what was declared on 1.8.99. Therefore, in the absence of evidence that the stocks were manufactured prior to 1.8.97 duty is chargeable at 16% advalorem. Notification No.50/97 is applicable only to the goods which are manufactured prior to 1.9.97. Since the appellants have opted only on 1.8.99 and there is no evidence to show that the stocks were prior to 1.9.97 we find that rate of duty is applicable is as per the tariff rate of 16% advalorem. Therefore, we do not find any infirmity in the order of Commissioner (Appeals). Accordingly, the impugned order is upheld and the appeal is rejected. - Decided against assessee

Summary

Issues:
Interpretation of Notification No.50/97 for levy of duty on finished goods under compound levy scheme.

Analysis:
The case involved an appeal against the Commissioner (Appeals) order regarding the levy of duty on finished goods under the compound levy scheme. The appellant-assessee had opted for the scheme under Section 3A from 1.8.1999 and declared the stock of bars, rods, ingots, and billets as on that date. The Assistant Commissioner had dropped the differential duty on these goods, but the Revenue appealed against this decision. The Commissioner (Appeals) set aside the dropping of differential duty and ordered the recovery of the demand as per the show cause notice.

The appellant argued that the duty on the finished goods should be as per Notification No.50/97, which they had paid specific rates on for the stocks declared before opting for the compound levy scheme. They contended that the notification applied to the entire stock once they opted for the scheme. The appellant relied on a Supreme Court judgment in support of their argument.

On the other hand, the Revenue maintained that the specific rate of duty under Notification No.50/97 applied only to goods produced before 1.9.1997, and since the appellant opted for the compound levy scheme from 1.8.1999, the standard rate of 16% ad valorem should apply. They cited the appellant's own returns to show that the stocks declared on 1.8.1999 were not produced before 1.9.1997. The Revenue also referred to a Supreme Court decision to support their position.

After considering both arguments, the Tribunal focused on whether the finished goods in stock as of 1.8.1999 should be charged duty at the specific rate under Notification No.50/97 or the standard rate of 16% ad valorem. The Tribunal agreed with the Commissioner (Appeals) that the appellant failed to provide evidence that the stock of goods was manufactured before 1.9.1997. Additionally, the verification report based on the appellant's monthly returns indicated discrepancies in the closing stock quantities. As a result, the Tribunal concluded that since there was no evidence that the stocks were produced before 1.9.1997, the duty was chargeable at the standard rate of 16% ad valorem. Therefore, the Tribunal upheld the Commissioner (Appeals) order, rejecting the appeal.