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TMI Blog2010 (1) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,129/- for not discharging the duty liability and for violating the provisions of Rule 96ZQ(5). While passing the order, the proceedings in relating to the show cause notice dated 16-9-99 which was covered by the show cause notice dated 29-6-1999 was sought to be dropped. The proceedings against the appellants were sought to be commenced in terms of show cause notices dated 29-6-99 and 16-9-99. 3. The appellants were engaged in processing of man made fabric falling under Chapter heading 52, 54, 55 and 60 of schedule to the Central Excise Tariff Act, 1985. During the period 1998-99 the appellants filed declaration dated 15-3-99 under Rule 3(1) of the Hot Air stenter Independent Textile Processors Annual Capacity Determination Rules 1998 consequent to the introduction of compounded levy scheme w.e.f. 16-12-1998. The production capacity and duty liability in that regard was provisionally fixed by order dated 20-4-99 whereby the monthly liability per chamber was fixed @ Rs. 1.50 lacs. As per the said order, there was one stenter consisting of three chambers installed in the appellant s factory during the period from 1998-99 and as a result the total duty liability was that of Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der provisional order issued vide C. No. IV(16)FAB/03/Tech-II/98 dated 30-12-1998 and further directed the appellants to pay penal amount of Rs. 6,12,150/- along with interest @ 36% on the outstanding amount to be calculated for the outstanding period and a penalty equal to the amount of the duty short paid. Being aggrieved, the appellants preferred appeal before CEGAT and by its order dated 13-11-2000 the CEGAT set aside the said order and directed the Commissioner of Central Excise to examine afresh the question whether the appellants were independent processors within the meaning of this expression in Notification No. 41/98-C.E. (N.T.) in the light of the decisions of the Supreme Court referred to by the Tribunal in the matter of Aar Kay Processors v. CCE, Chandigarh reported in 2000 (121) E.L.T. 74 (T). On remand, the Commissioner after hearing the parties held that at the relevant time the appellants were not covered under definition of the independent processors and hence they were not liable to pay the duty under compounded levy scheme. Accordingly, the demand of Rs. 6,12,150/- made under the earlier order of the Commissioner was dropped. 5. It was after the conclusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unit engaged in manufacturing of fabrics from 20-3-99. In any case, according to the learned DR the order speaks of the status of the appellants not to be of independent processors for the relevant time and as per the claim of the appellants themselves the relevant time commences from 16-3-99 and, therefore, the order of the Commissioner dated 31-5-2005 cannot be said to be related to the period prior to 16-3-99 and hence it was open to the Assistant Commissioner to deal with the period prior to 16-3-1999. He further submitted that there is a clear finding in the order of the Assistant Commissioner that Shri Kanwal Nayyar in his statement dated 26-3-99 had admitted that they started the production w.e.f. 12-3-99 and hence no fault can be found with the impugned order fixing liability for the period from 12/03 till 15/03. It was sought to be contended that the show cause notices dated 29-6-99 and 16-9-99 were not the subject matter of the earlier proceedings which culminated in the order dated 31-5-2005 and, therefore, the Assistant Commissioner was not without jurisdiction to deal with the matter and certainly not in relation to the period which was not the subject matter of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 315 linear mtr. and for the month of May 1999, 62150 linear mtr. fabric was produced in knitted unit and was sent to parent unit for processing and the knitted fabric, so produced in the knitted unit was not sold in the open market. The order does not disclose the claim made in that regard by the appellants having been disputed at any time by the department. In the background of facts and figures which were submitted to the adjudicating authority and based on which the Commissioner arrived at the finding that for the relevant period the appellants were not covered by the definition of independent processors under the said scheme. It is difficult to accept the contention on behalf of the department about the production having started from 12/03 solely on the basis of the statement of Sh. Kanwal Nayyar dated 26-3-99 referred by the Assistant Commissioner in his order. Nothing prevented the Assistant Commissioner to ascertain from the records as to whether really there was production during the period from 12/03 till 15-3-99 and not to base the finding on the statement of Sh. Kanwal Nayyar more particularly in view of detail facts and figures disclosed by the assessee in the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay the duty under the compounded levy scheme, automatically the provisional order stood vacated. It is not the case of the department that subsequent to the order dated 31-5-2000, there was any efforts on the part of the department to reassess the production capacity and to refix the liability of the appellants, in such circumstances, question of demanding any duty either for the period from 12th March to 19th March or even upto 15th March cannot arise. 13. It is also to be noted that the order dated 31-5-2005 not only declared the status of the appellants but also had dropped the demand of Rs. 6,12,150/- as is apparent from the order dated 26-4-2000. 14. Plain reading of the order passed by the Assistant Commissioner discloses that he was fully aware of the fact that the Commissioner by his order dated 31-5-2005 has clearly held that appellants were not the independent processors for the relevant period and they were not liable to pay the duty under compounded levy scheme. He was also aware that demand of Rs. 6,12,150/- was vacated by the Commissioner. Inspite of that, one wonders how the Assistant Commissioner could have arrived at the finding that the order of the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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