2000 (12) TMI 467 - AT - Central Excise

Summary

Issues:
Confirmation of demand of duty under Rule 96ZO(3) for two furnaces, annual capacity fixation, payment of duty for non-notified goods, separate RT-12 returns, imposition of personal penalty.

Confirmation of Demand of Duty under Rule 96ZO(3) for Two Furnaces:
The judgment pertains to the confirmation of a duty demand of Rs. 98,14,200 against the appellants by the Commissioner of Central Excise, along with a personal penalty of Rs. 98.00 lakh. The appellants had two induction furnaces, one used for notified goods and the other for non-notified goods. The appellants argued that the Compounded Levy Scheme applied only to notified goods and not non-notified goods. They maintained separate records and filed separate RT-12 returns for the two types of goods. The Tribunal agreed with the appellants, stating that duty liability under Rule 96ZO(3) applied only to the furnace used for notified goods, not both.

Annual Capacity Fixation:
The Commissioner had fixed the annual production capacity despite the appellants opting for Rule 96ZO(3), which made the fixation irrelevant. The Tribunal found that the fixation was misconceived, especially since the appellants were already paying duty under Rule 96ZO(3). The Tribunal held that the fixation of annual capacity was unnecessary in this context.

Payment of Duty for Non-Notified Goods:
The Tribunal noted that the Commissioner had confirmed duty demands for both furnaces under Rule 96ZO(3) without considering the payment made by the appellants for non-notified goods. The Tribunal ruled that duty liability for non-notified goods was correctly discharged at the ad valorem rate and not under Rule 96ZO(3).

Separate RT-12 Returns:
The appellants started filing separate RT-12 returns for notified and non-notified goods as per the Central Excise Authorities' advice. This practice was acknowledged by the authorities, indicating the appellants' compliance with the duty payment requirements for the respective goods.

Imposition of Personal Penalty:
The Tribunal found no justification for imposing a personal penalty on the appellants as they had discharged their duty liability in accordance with the law. The penalty was set aside based on the appellants' compliance with duty payment regulations.

In conclusion, the Tribunal held that Rule 96ZO(3) applied only to the furnace manufacturing notified goods, not both furnaces. The annual capacity fixation was deemed irrelevant due to the appellants' payment under Rule 96ZO(3). Duty payment for non-notified goods was correctly done at the ad valorem rate. The imposition of a personal penalty was unjustified and set aside. The Tribunal partially set aside the impugned order and remanded the matter for further adjudication in light of the Board's Circular regarding duty payment for August 1997.