Central Excise Appeal No. 83 of 2007 1
In the High Court of Punjab & Haryana at Chandigarh
Central Excise Appeal No. 83 of 2007.
Date of decision : 11.8.2008
M/s. Vashisht Ispat Products ..... Appellant
vs
Customs, Excise and Service Tax Appellate Tribunal
and another
..... Respondents
Coram: Hon'ble Mr. Justice Hemant Gupta
Hon'ble Mr. Justice Rajesh Bindal
Present: Mr. Pawan K. Pahwa, Advocate, for the appellant.
Mr. Sanjeev Kaushik, Advocate, for the respondents.
Rajesh Bindal J.
The assessee has filed the present appeal under Section 35 G of
the Central Excise Act, 1944 (for short, ‘the Act’) against the order passed
by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for
short, “the Tribunal”), in Final Order No. 1517/06-SM (BR) dated
18.10.2006, raising the following substantial questions of law:-
(i) Whether duty can be demanded for the period
September 1997 to March 2002 on the basis of Show
Cause Notice’s dated 24.09.98, 03.11.98, and
27.08.2002 when the duty liability was finally
determined on 29.03.2004?
(ii) Whether the show cause notices dated 24.09.1998 and
27.08.2002 respectively are time barred?
(iii) Whether interest on demand of duty can be confirmed
by Hon’ble Tribunal for the period prior to the date of
determination of the annual capacity?
(iv) Whether natural justice has been violated by
respondent by ignoring the submissions made by the
appellant; wrongly and arbitrarily interpreting the
supporting documentary evidence produced by the
appellant?
Central Excise Appeal No. 83 of 2007 2
(v) Whether order of the respondent No.1 is sustainable
in law?
(vi) Whether in the facts and circumstances of the present
case, orders passed by Respondents are arbitrary,
illegal and perverse and thus liable to be quashed?”
The assessee in the present case is manufacturer of non alloy
steel products falling under Chapter-72 of the Schedule to Central Excise
Tariff Act, 1985. With effect from 1.9.1997, the products manufactured by
the appellant were subjected to duty under Compounded Levy Scheme
under the Act. To give effect to the scheme, Section 3A was added in the
Act and Rule 96 ZP was added in the Central Excise Rules, 1944. As the
basis for levy of excise duty under the Compound Levy Scheme was
capacity of production, to determine the capacity of production, Hot Re-
rolling Steel Mills Annual Determination Rules, 1997 (for short, ‘the
Capacity Determination Rules’), were framed for the purpose. Certain
parameters were provided in the Capacity Determination Rules on the basis
of which the capacity was to be determined.
Vide order dated 10.12.1997, annual capacity of production of
the appellant was determined as 1445 MT. However, in appeal, the Tribunal
vide order dated 24.12.1998, while setting aside the order remanded the
case back to the Commissioner for fresh decision. Prior thereto on the basis
of capacity already determined vide order dated 10.12.1997, the
respondents had issued show cause notice to the appellant for payment of
duty. After remand by the Tribunal, the annual capacity of production was
determined by the Commissioner vide order dated 9.2.2000. The above
order was again set aside by the Tribunal vide order dated 4.9.2000 and the
case was remanded back. Finally it was on 29.3.2004 that the annual
capacity of production of the assessee was determined as 1445 MT from
1.9.1997 to 1.8.1999, and 970.392 MT for the period from 2.8.1999 to
31.3.2000 and it was on the basis thereof that the duty was demanded from
the appellant, which according to the appellant, has already been paid and
the dispute in the present case remains only for the payment of interest on
account of delay in payment thereof.
Learned counsel for the asssessee submitted that as the final
order determining the capacity of production of the assessee came to be
Central Excise Appeal No. 83 of 2007 3
passed on 29.3.2004, the assessee could be asked to pay the interest, if any,
only from that date and not from any date prior thereto. However, we find
the contention of the learned counsel to be totally misconceived. The annual
capacity production of the assessee was for the first time determined on
10.12.1997 and thereafter at the behest of the assessee the same remained
under litigation and finally the capacity was determined the same as was
originally determined vide order dated 10.12.1997. It was only w.e.f.
2.8.1999 that the lesser capacity of production was determined and the
reason therefor was that in the subsequent period there was change in the
machinery installed in the unit of the assessee. Applying the change in
parameters for the assessment of the capacity, the annual capacity of
production of the assessee was reduced. Merely because the assessee was
litigating for determination of his annual capacity, he cannot be permitted to
raise that interest should not be charged from him on account of delay in
deposit of excise duty from the date when the duty was required to be paid,
especially when the capacity of production was the same as was originally
fixed.
For the reasons mentioned above, we do not find any
substantial question of law arises in the present appeal. The same is,
accordingly, dismissed with no order as to costs.
( Rajesh Bindal)
Judge
11.8.2008 (Hemant Gupta)
vs. Judge