2017 (2) TMI 257 - AT - Central Excise

Valuation - whether the appellants-manufacturer of M.S. Ingots who had initially opted to pay duty under the provisions of Rule 96ZO read with Sec 3A of the Central Excise Act and subsequently in the month of April/May, 1998 changed option to pay duty on actual production basis, is liable to pay duty u/s 3 or u/s 3A, on the compounded levy amount or on the basis of actual production, for the period April, 1999 to March, 2000? Held that - the issue involved had already been considered by the Tribunal while remanding the case in Final Order No.A/387 - 388/99-NB dated 4th May, 1999 and, therefore, the appellant (that is revenue) could not issue another show cause notice and levy Excise Duty in as much as the earlier proceedings which had attained finality, operate as res judicata - appeal allowed, setting aside the impugned order and remand the matter back to the adjudicating authority to re-determine the duty payable on the basis of actual production - appeal allowed by way of remand.

Summary

Issues:
Whether the appellant assessee is liable to pay duty under Section 3 or Section 3A for the period April 1999 to March 2000.

Analysis:
The appeals were filed by the appellant assessee against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs. The main issue revolved around the liability to pay duty under Section 3 or Section 3A for the period in question. The appellant, a manufacturer of M.S. Ingots, initially opted to pay duty under Rule 96ZO read with Section 3A but later changed the option to pay duty on actual production basis. The Tribunal had previously held that Rule 96ZO(3) is in conflict with Sub-section 4 of Section 3A, emphasizing that where there is a conflict between the Section and the Rule, the Rule does not override the Section. The Tribunal remanded the matter for the determination of Annual Capacity of Production based on actual production under Section 3A(4) of the Act.

In a previous order, the Tribunal directed the Commissioner to follow the earlier order and consider the appellant's application for re-determination of duty on actual production basis. The Tribunal cited a ruling of the Bombay High Court emphasizing that the Commissioner is bound to follow the Tribunal's directions. The Tribunal also noted that the Revenue's appeal against the earlier order was dismissed by the Supreme Court on the ground of limitation. Subsequently, the Revenue's appeal against the Tribunal's order was also dismissed by the Supreme Court, upholding the principle of res judicata due to the earlier proceedings attaining finality.

Considering the previous rulings and the decisions of the Supreme Court, the Tribunal allowed the appeals, setting aside the impugned order, and remanded the matter to the adjudicating authority for re-determination of duty payable based on actual production. The appellant was directed to appear before the adjudicating authority within 60 days from the date of receipt of the order to seek an opportunity for a hearing. The appeals were allowed by way of remand, emphasizing the importance of determining duty based on actual production in line with previous directions and legal principles.

This detailed analysis of the judgment highlights the legal intricacies involved in determining the liability to pay duty under specific sections of the Central Excise Act and the significance of following earlier orders and legal precedents in such matters.