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TMI Blog2018 (8) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision for abatement of duty by itself? If so, how that abatement under sub section 2 of Section 3A should be followed read with Rule 2 of Rule 96ZP? Matter Referred to Larger Bench. - Appeal No. E/240/2009 - Final Order No. A/30731/2018 - Dated:- 19-7-2018 - Mr. M. V. Ravindran, Member ( Judicial ) And Mr. P. V. Subba Rao, Member ( Technical ) Shri Arun Kumar, Dy. Commissioner/AR for the Appellant Shri B. Venugopal, Advocate for the Respondent ORDER [ Order Per : P. Venkata Subba Rao ] 1. This appeal is filed by Department against Order-in-Appeal No. 29/2008 (H-I) (D) CE, dated 18.12.2008. 2. Heard both sides and perused the records. 3. The respondent herein are the manufacturers of MS Re-rolling product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly intimated to the department and therefore there cannot be any duty liability during that period. The show cause notice demanding duty is, therefore, illegal and unjust. They further asserted that proviso to Sub Section 2 of Section 3A of Central Excise Act reads as follows: Provided that when a factory producing notified goods is in operation only during a part of the year, the production thereof shall be calculated on proportionate basis of the annual capacity of production. Therefore, they are not liable to pay any duty for the period during which their factory was closed. 5. Under Rule 96 ZP, there are two options under which the assessee can discharge duty. Under Sub rule (1) of Rule 96 ZP, the assessee is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining the merits of the case. Revenue filed appeal before CESTAT, Bangalore who, vide Final Order No. 838/2005, dated 27.05.2005 remanded the matter back to the Commissioner (Appeals) directing that a decision on merits be taken after following principles of natural justice. Ld. Commissioner (Appeals) vide his order A.No. 2/2005 (H-I) (D) CE, dt. 26.04.2006 again rejected the appeal holding that although the appeal carries substance on merit, it is not maintainable being incomplete and rejected it. Revenue s appeal to the CESTAT against this second Order-in-Appeal was decided by CESTAT vide Final Order No. 1272/2008, dt. 05.11.2008 who remanded the matter back to the Commissioner (Appeals) with a specific direction to issue the order wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fixation of annual capacity for the subsequent year in case where in case where unit has not worked for certain period in a year. Rule 96ZP(3) provides for concessional rate of duty of manufacturer subject to the condition that he does not get any benefit under section 3A(3) and 3A(4) of Central Excise Act, 1944 which provide for abatement of duty and re-determination of duty respectively. (d) In the case of Supreme Steels General Mills Ltd [2001(133)ELT 513 (SC)], the Hon ble Supreme Court has held that the manufacturer cannot opt twice during the financial year for choosing to pay in accordance with sub-rule (3) of Rule 96ZO (which contains provisions similar to sub-rule (3) of Rule 96ZP on the basis of total capacity installe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed in para 10 The Ld. Advocate s prayer for giving benefit under the above proviso [ proviso to Section 3A(2)] was strongly opposed by the Ld. Departmental representative. However, he was not in a position to state why the benefit of the said proviso cannot be extended to the respondents. Thus, it is apparent that the fact that Sub Section (2) of Section 3A including its proviso deals with the Government s power to make rules and not with abatement of duty, was not considered or examined by the Tribunal (Bangalore) in case of Handum Iron Steel Enterprises Ltd. It also appears that in that case the departmental representative did not contest it on this ground although he opposed extending the benefit of this provisio. In the case b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sub Rule 2 of Rule 96ZP read with proviso to Sub Section (2) of Section 3A. 10. In the impugned Order-in-Appeal, the Ld. Commissioner (Appeals) has relied upon the order of CESTAT, Bangalore in the case of Handum Iron Steel Enterprises limited (supra) and held that the assessee is entitled to the benefit of abatement under proviso to Sub Section (2) of Section 3A and dismissed the appeal of the Revenue. It also does not appear that the Commissioner (Appeals) has taken into account the fact that sub section (2) of Section 3A does not provide for abatement at all but only deals with the power of the Government to make rules, subject to some guidelines including that provisions for abatement must be made. 11. Thus, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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