2016 (6) TMI 570 - AT - Central Excise

Short payment of duty on account of non-consideration of revised parameters - Held that - As per the provisions of Rule 4 of Capacity Determination Rules, 1997, re-determination of APC and benefit of concessional rate of duty based on d factor is warranted only in case of change in existing parameter. As the change in parameter is made effective w.e.f. 17.10.1997 only, for the period prior to 17.10.1997, Commissioner rightly and correctly fixed APC based on existing parameters. Hence,find that the demand for duty short paid by the Assessee as mentioned in Show Cause Notice sustains on merits and warrants confirmation and recovery Period of limitation - Held that - Recoveries of amounts under the compounded levy scheme for re-rollers is not covered by the general time limit prescribed under Section 11A of Central Excise Act, 1944. In the light of above decision, the time limit factor does not affect the validity of the Show Cause Notice. See M/s Venus Casting and Raghuvir (India) Ltd 2000 (4) TMI 37 - SUPREME COURT OF INDIA . Hence no deficiency in the above finding of the learned Commissioner to the extent confirmation of duty. However, penalty and interest under Rule 96ZP of erstwhile Central Excise Rules,1944 cannot be sustained in view of the recent judgment of the Hon ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills Vs.CCE, 2015 (11) TMI 1172 - SUPREME COURT - Decided partly in favour of assessee.

Summary

Issues:
- Dispute over short payment of duty due to non-consideration of revised parameters for a specific period.
- Validity of demand notice issued beyond the stipulated time limit.
- Imposition of penalty and interest under Rule 96ZP of erstwhile Central Excise Rules, 1944.

Analysis:
1. Dispute over Short Payment of Duty:
The appeal was filed against an order passed by the Commissioner regarding the short payment of duty for a specific period. The appellant, engaged in manufacturing excisable goods, disputed the duty amount due to non-consideration of revised parameters. The Commissioner had fixed the Annual Capacity of Production (APC) based on certain parameters, with the appellant challenging the short payment of duty for the period in question. The Commissioner's order was upheld concerning the demand for duty short paid, as the change in parameters was deemed effective only from a later date, justifying the duty amount calculated based on existing parameters for the disputed period.

2. Validity of Demand Notice Time Limit:
The appellant contended that the demand notice was issued beyond the stipulated time limit of six months. However, the Commissioner, citing a circular and a tribunal decision, ruled that the time limit factor did not affect the validity of the Show Cause Notice. The circular highlighted that recoveries under the compounded levy scheme for re-rollers were not bound by the general time limit prescribed under the Central Excise Act, 1944. The Commissioner found no violation of the principle of natural justice, stating that sufficient opportunities for a personal hearing were provided, thus upholding the validity of the demand notice.

3. Imposition of Penalty and Interest:
Regarding the imposition of penalty and interest under Rule 96ZP of the erstwhile Central Excise Rules, 1944, the Tribunal modified the order. Citing a recent judgment of the Supreme Court in a similar case, the Tribunal held that the penalty and interest provisions under the specific rules were invalid. Referring to the Supreme Court's decision, the Tribunal dismissed the penalty and interest imposed, aligning with the Supreme Court's ruling on the matter. Consequently, the order was modified to exclude the penalty and interest, and the appeal was disposed of accordingly.

In conclusion, the judgment addressed the dispute over duty payment, the validity of the demand notice time limit, and the imposition of penalty and interest under specific rules, providing a detailed analysis and aligning with legal precedents and rulings to resolve the issues raised in the appeal.