9911796707
TMI Blog2024 (8) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- The Commissioner finally determined the annual capacity of production of the appellant as recorded in para 3.4.6 that the appellant were paying duty @ Rs.400/- per MT. It clearly shows that they were working under Rule 96 ZP(1) instead of 96 ZP(3) of the Rules - the demand of duty on the basis of annual capacity of production of the unit fixed by the competent authority is not sustainable in view of the fact that the order of the Commissioner dated 30.10.2003 fixing the annual capacity of production was set aside by the Tribunal in OSAKA ALLOYS STEELS PVT. LTD. VERSUS COMMISSIONER OF C. EX., JALANDHAR [ 2005 (7) TMI 236 - CESTAT, NEW DELHI] . The appellant have fully discharged payment of duty in accordance with Section 3A, Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that as the appellant had opted to pay duty under Section 3A of the Central Excise Act, 1994 (hereinafter referred to as the Act) as per their option under sub-Rule (i) of Rule 96ZP, their annual capacity was fixed by the Commissioner of Central Excise, Chandigarh-II vide letter dated 21.11.97 as 3755.530 MTs (provisionally) under Rule 3(4) of Hot Re-Rolling Mills Annual Capacity Determination Rules, 1997. As such, the appellant were required to pay central excise duty of Rs.1,25,184/- per month w.e.f. 01.09.1997. During the period September, 1997 to March, 1998, the appellant did not pay central excise duty as determined by the Commissioner, Central Excise, Chandigarh-II which resulted in short paid central excise duty to the tune o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 01.08.1997 and therefore, they had legitimately availed the Modvat Credit during the month of August, 1997 and accordingly demand of Rs.1,24,027.67 is not sustainable; ii) that the demand of short payment of Central Excise duty of Rs.5,10,756/ has been confirmed for the period September, 1997 to March, 1998. The appellant had discharged central excise duty during the subject period while taking into account the period of closure of the factory and their eligible abatements under Rule 96 ZP(2) of the Rules; that the appellant followed the procedure of abatement as provided under Rule 96 ZP and accordingly paid the central excise duty for the period of operation of unit during the period September, 1997 to March, 1998; iii) that vide let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of Rs.5,10,756/- without accounting for eligible abatements for the period of closure is not sustainable. vi) that the imposition of penalty under Rule 173Q of the Rules is also liable to be set aside because the demand itself is not sustainable. 5. On the other hand, the learned Special Counsel (AR) for the Revenue reiterated the findings of the impugned order and has further submitted that the appellant vide letter dated 09.09.1997, exercised the option to pay the duty under Rule 96 ZP(3) and that said option was not withdrawn. He has further submitted that once the option is exercised as per Rule 96 ZP(3), the same cannot be withdrawn during the said relevant year. He has further submitted that the appellant vide letter dated 26.03.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 96 ZP(3). Further, we find that the demand of duty on the basis of annual capacity of production of the unit fixed by the competent authority is not sustainable in view of the fact that the order of the Commissioner dated 30.10.2003 fixing the annual capacity of production was set aside by the Tribunal vide order dated 19.07.2005; further the department filed the appeal before the Hon ble High Court and the High Court vide order dated 22.01.2007 dismissed the appeal of the department and subsequently, the Hon ble Supreme Court also dismissed SLP filed by the department vide order 10.09.2007 and the same was accepted by the department. 9. In view of our discussion above, we are of the considered opinion that the appellant have fully disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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