9911796707
TMI Blog2000 (8) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter 72 became liable to duty in terms of Section 3A of the Central Excise Act, 1944 under the Compounded Levy Scheme on the basis of annual capacity of production. Rule 96ZO which provides the procedure to be followed by manufacturer of ingots and billets operating under the Compounded Levy Scheme provides under Sub-rule (1) that the manufacturer has to debit an amount calculated at the rate of 750 PMT on the capacity of production determined by the Commissioner. Rule 96ZO (3) gives an option to the manufacturer to pay a lump sum of Rs. 5 lakhs. However, under the proviso to Section 3A(3), the manufacturer can claim abatement of duty if the factory producing the notified goods does not produce the same during a continuous period of seven days and the duty calculated on the proportionate basis shall be abated in respect of such period if the manufacturer fulfils such conditions as may be prescribed by rules. The Appellants filed abatement claim on account of non-production of the notified goods, namely, ingots and billets for the period up to 31-3-99. They had to cease production of the items on account of adverse market conditions prevailing in the sale of ingots/billets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an seven days. The non-production need not necessarily mean closure of the whole factory for the period. It was enough that it is shown that notified goods were not produced in the factory for a period of not less than 7 continuous days. This was sufficient for claiming abatement under that sub-section. Referring to Rule 96ZO(2) and the conditions mentioned therein, it is contended that the said provision applies only to a case where the factory is exclusively producing ingots and billets. Rule 96ZO(2) did not apply to a case like that of appellants where the factory was producing notified as well as non-notified goods. The Department itself has not disputed the fact that the appellants factory was producing non-alloy castings as well as non-alloy steel ingots and billets. As regards the conditions mentioned in Rule 96ZO(2), it is pointed out that the appellants have complied with all the requirements, such as, informing the concerned jurisdictional authority about the date and time of closure, meter reading, stock of ingots and date and time of restarting of the manufacture of the notified goods. The Department has not raised any dispute in relation to any of these aspects. If th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), the assessee is required to intimate the Assistant Commissioner, the electricity meter reading at the time of closure as well as at the time of restarting of the unit, it was necessary, that for claiming abatement the entire factory should have been closed during the period for which abatement is claimed. This condition not having been satisfied by the appellants, the abatement was rightly rejected by the Commissioner. Ld. JDR therefore prayed for confirming the impugned order and for dismissing the appeals. He also relied on the observations in para 8 of the Tribunal s order in CCE, New Delhi v. Avis Electronics [2000 (117) E.L.T. 571 (Tribunal) = 2000 (37) RLT 501] wherein it was observed that when a particular thing is directed to be performed in a manner prescribed by rules, it should be performed in that manner itself and not otherwise. 6. We have considered the rival submissions and perused the records. The issue relates to the correct interpretation of Section 3A(3) with its proviso vis-a-vis Rule 96ZO(2). The two provisions are extracted as under : Section 3A (3). The duty of excise on notified goods shall be levied, at such rate as the Central Government may by n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a factory producing notified goods does not produce the notified goods during a continuous period of not less than 7 days provided the manufacturer fulfils the conditions prescribed under the rules. There is no dispute that concerned rule for purposes of the present dispute is Rule 96ZO(2). Rule 96ZO(1) clearly states that the rule applies to a manufacturer of non-alloy steel ingots and billets falling under sub-headings 7206.90 and 7207.90 of the Schedule to the CETA. Further, it will be observed that in the opening portion of sub-rule (2) of the said rule, reference has been made to Section 3A(3) and it has been stated that abatement will be allowed by an order passed by the Commissioner subject to fulfilment of conditions (a) to (e) mentioned therein. No doubt, conditions (a) to (e) require the manufacturer to inform the Assistant Commissioner about closure , the electricity meter reading, the closing balance of stock of ingots and billets as well as the electric meter reading on start of production again. Ld. Counsel has argued that the provisions of Rule 96ZO applies only to a factory which exclusively produces non-alloy steel ingots and billets (notified items). However, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and billets. Further, it would also appear that Rule 96ZO(2) while purporting to prescribe the manner of collection of duty and the basis of calculation of duty abatement has narrowed down the scope of the opening portion of sub-section (3) of Section 3A. Whereas the proviso to Section 3A(3) talks of a situation whether the factory producing notified goods do not produce the notified goods for a continuous period of not less than 7 days, in the conditions laid down under Rule 96ZO(2), the manufacturer is required to inform the Assistant Commissioner about the closure of the factory and the details about the electricity meter reading, the closing balance of the stock etc. at the time of closure and similar details at the time of restart of production. It is to be noted that the proviso to Section 3A(3) does not talk of closure of the factory but only of non-production of notified goods during a continuous period of not less than 7 days. Non-production of notified goods can take place even without closure of the factory for various other reasons. Non-production of notified goods in the factory cannot automatically be equated with the closure of the factory and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
