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TMI Blog2025 (2) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in Hans Steel Rolling [2011 (3) TMI 2 - SUPREME COURT] for applicability of section 11A of the Central Excise Act would also be applicable to the provisions of section 11B of the Central Excise Act. It has, therefore, to be held that the provisions of section 11B of the Central Excise Act would not be applicable to cases where excess duty paid is adjusted against future duty liability in terms of the provisions of the compounded levy scheme contained in the notification dated 01.08.1997 issued under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules. The appellant had not paid duty under section 3 of the Central Excise Act for the month of August 1997, as admittedly the duty of Rs. 750 per metric tonne was paid under rule 96ZO of the Central Excise Rules and it is only because subsequently the said rule was made applicable from 01.09.1997 and not 01.08.1997 that the appellant became entitled to adjustment of excess central excise duty paid for the month of August 1997. Conclusion - Section 11B of the Central Excise Act would not be applicable to matters covered by section 3A of the Central Excise Act as the provisions of the said secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T) on all excisable goods which are produced or manufactured in India as, and at the rates, set forth in the Schedule I to the Central Excise Tariff Act, 1975. 6. Section 3A of the Central Excise Act, which was inserted w.e.f. 14.05.1997, deals with the power of the Central Government to charge central excise duty on the basis of capacity of production. It provides that notwithstanding anything contained in section 3, in respect of goods notified by Central Government under section 3A, the central excise duty shall be levied and collected by deeming the annual capacity of production of the factory to be the annual production of such goods by the factory and the duty of excise on such notified goods would be at such rate as notified by the Central Government. 7. In exercise the powers conferred under section 3A of the Central Excise Act, the Central Government issued a notification dated 01.08.1997 notifying steel ingots of sub-heading 7206.90 as goods on which duty of excise shall be levied and collected in accordance with the provisions of section 3A. 8. At the same time, the Central Government by another notification dated 01.08.1997, inserted rule 96ZO in the Central Excise R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Duty paid under Section 3, on the excisable goods manufactured prior to 01.09.1997 was not in the nature of on account of payment under Section 3A. Hence, the amount paid in excess, if any, in terms of Section 3 of the Act (out side the Scheme) is not admissible for adjustment under the provisions of the Scheme viz. Rule 96ZO(1)(b) of the erstwhile Rules 1944 readwith Section 3A of the Act. 3.9 It is true that, in respect of clearances effected under Section 3 of the Act (clearance under normal procedure), there is an excess payment of Rs. 1,06,850/- as discussed in para 3.6 [supra]. However, the Noticee were informed long back, vide letter F. No. ARVL/Jaidev/98 dated 21.04.1999 by Range Superintendent, to seek refund of the said amount, in terms of the provisions contained in the Central Excise law. Instead of doing so the Noticee have suo-moto adjusted the said excess payment against the duty liability under the Scheme for March 2000. Unless the procedure contained in Section 11B of the Act, for claiming refund of any excess duty paid, is followed and the legal provisions contained therein are fully complied with, including the clause relating to unjust enrichment, the Noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.05.2008, is reproduced below: "(1) Notwithstanding anything contained in section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section. (2) Where a notification is issued under sub-section (1), the Central Government may, by rules, provide for determination of the annual capacity of production, or such factor or factors relevant to the annual capacity of production of the factory in which such goods are produced, by the Commissioner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation only during a part of the year, the production thereof shall be calculated on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng amount calculated for the period from the 1st day of April, 1998 till the date of actual payment of the outstanding amount: Provided that if the manufacturer fails to pay the total amount of duty payable under clause (a) by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on 30th day of April, 1998 or five thousand rupees, whichever is greater. II. Total amount of duty liability for a financial year subsequent to 1997-98 (a) a manufacturer shall pay a total amount calculated at the rate of Rs. 750/- per metric tonne on the annual capacity of production of his factory as determined under the Induction Furnace Annual Capacity Determination Rules, 1997. This amount shall be paid by the 31st day of March of the financial year; (b) the amount of duty already paid, together with on-account amount paid by the manufacturer, if any, during the financial year shall be adjusted towards the total amount of duty liability." 19. The adjustment made of the excise duty made in the month of March 2000 was denied to the appellant by the order dated 25.09.2001 for the reason that the appellant should have applied for refund o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants that initially the annual production capacity was fixed as 2.3 MT under Section 3A for levy of compounded duty and subsequently, it was re-determined as 2.6 MT. Pending re-determination, the appellants had paid higher amount of duty under the compounded levy scheme and the impugned refund relates to the duty payment at a higher rate of compounded levy. The appellants further submit that the sale price of the finished goods has remained the same and that the refund claim has arisen on account of adjustment under Section 3A (5) for which the provisions of unjust enrichment cannot apply. 2. Considering the fact that the sale price has not changed and the appellants were paying duty at a fixed rate under the compounded levy scheme without having any relation to the actual clearance, the question of applying the bar of unjust enrichment in such a case cannot arise. As such, we are of the view that the appellants are entitled to refund of the excess duty and the orders passed by the lower authorities cannot be sustained. 3. Accordingly, the impugned orders are set aside and the appeal is allowed with consequential benefit to the appellants. Gist of our order as above was pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the goods manufactured by the appellants were chargeable to Central Excise Duty in terms of Section 3A of the Act. As per the Act, the duty was suppose to be paid on the annual production capacity of the plant, irrespective of the actual production. Under the scheme of Section 3A, the payment of duty to be under Rule 96ZP of the Central Excise Rules. The Hot-Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 were introduced by Notification No. 32/97-C.E. (N.T.), dated 1-8-1997, wherein the manner and procedure for determination of annual capacity of rolling mill was provided. On 27-4-1998, the Commissioner of Central Excise determined the Annual Capacity to be 3355 MT. xxxxxxxxxx 12. On going through the records it is clearly established that the appellants are availing the facilities under the Compound Levy Scheme, which they themselves, opted for and filed declarations furnishing details about annual capacity of production and duty payable on such capacity of production. It has to be taken into consideration that the compounded levy scheme for collection of duty based on annual capacity of production under Section 3 of the Act and Hot Re-rolling Steel Mills An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Rules is also a compounded levy scheme. It provides for a mechanism where duty liability can be adjusted. Though the issue involved in the matter before the Supreme Court was applicability of section 11A of the Central Excise Act to compounded levy scheme, the issue in the present appeal is whether section 11B of the Central Excise Act would be applicable. The law laid down by the Supreme Court in Hans Steel Rolling for applicability of section 11A of the Central Excise Act would also be applicable to the provisions of section 11B of the Central Excise Act. It has, therefore, to be held that the provisions of section 11B of the Central Excise Act would not be applicable to cases where excess duty paid is adjusted against future duty liability in terms of the provisions of the compounded levy scheme contained in the notification dated 01.08.1997 issued under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules. 26. The reason provided by the Commissioner, in the impugned order dated 25.09.2001, for rejecting the claim of adjustment made against the duty liability for the month of March 2000 is that excess duty was paid by the appellant un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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