Cce-Jaipur-I vs Mills Pvt. Ltd

[Arising out of order-in-appeal No. 27 (MPM)CE/JPR-I/2006 dated 18.01.2006/6.02.2006 read with corrigendum No. C. NO. APPL/JPR-I/CE/JP/398/IX/2005/1130 dated 24.03.2006 passed by Commissioner (Appeals-I), Customs and Central Excise, Jaipur]

1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

M/s. Bhupendra Iron Rolling

Mills Pvt. Ltd.

CCE-Jaipur-I Appellants

Vs.

CCE-Jaipur-I

M/s. Bhupendra Iron Rolling

Mills PVT. Ltd. Respondents

Appearance: Shri Ashok Jindal, Member (Judicial)

Shri B. Ravichandran, Member (Technical)

Final Order No. 52276-52277/2015

Per: B. Ravichandran

The appellants are manufacturers of hot re-rolled products of iron. They started production w.e.f. 9/7/1998. Their operations were covered under Rule 96 ZP of Central Excise Rules, 1944 and they filed declaration under Rule 96ZP (4). Their annual capacity was fixed vide order dated 1/7/1998. The same was changed w.e.f. 9/7/1998 vide order dated 9/9/1999. Aggrieved by the said order, the appellant preferred appeal and the Tribunal remanded the matter to the Ld. Commissioner vide order dated 31/3/2000. The Ld. Commissioner again fixed the annual capacity of production vide order dated 27/3/2001. The appellant preferred appeal again and the Tribunal vide order dated 12/9/2001 again remanded the matter to the Ld. Commissioner. The department filed a reference petition before the Honble High Court of Rajasthan which was rejected. On de-novo proceedings, the ld. Commissioner fixed the annual capacity of production w.e.f. 30/7/1999. Again, aggrieved by the said order, appeal was preferred by the appellant and the Tribunal vide order dated 4/2/2004 directed that the date for change in the parameter of production capacity is to be taken from 1/1/1999.

2. 5 show cause notices were issued to the appellant covering the period July, 1998 to June, 1999. The demand in 3 show cause notices was on the ground that the declaration under Rule 96 ZP (4) filed by the appellant on 17/7/1998 were not on record and as such duty liability has to be determined under Rule 96 ZP (1), i.e., @ 400 per metric tonnes. The remaining two notices were based on annual capacity fixed by the Commissioner for applying @ 400 per metric tones. The demands were decided by the original authority and the same were confirmed with equal penalty. The appellant filed further appeal and the ld. Commissioner (Appeal) set aside the order of the original authority and remanded the matter back to de-novo consideration. The original authority again confirmed the demand with equal penalty under Rule 96 ZP and also penalty of Rs. 60,000/- under Rule 173Q. The appellants went on appeal to Commissioner (appeals) who vide order dated 18/1/2006 held that the ACP was w.e.f. 1/1/1999 as per CESTAT order. Since the appellant had filed declaration to the department, the penalties imposed under Rule 96ZP and Rule 173Q are set aside.

3. Appellant is before us against this impugned order. It was pleaded that the ld. Commissioner (Appeal) has not passed any order on the demand pertaining to the period July, 1998 to December, 1998 and he also wrongly presumed that the date of filing declaration has been decided by the CESTAT as 1/1/1999. The appellant strongly contended that they have filed declaration dated 17/7/1998 under Rule 96ZP (4) of Central Excise Rules, 1944 and the Commissioner (appeal) erroneously was applying the date of 1/1/1999 which is for fixation of ACP. The department also has filed an appeal against the impugned order of the ld. Commissioner (appeal) praying for equal penalty under Rule 96ZP of Central Excise Rules, 1944 along with interest for the period 1/7/1998 to 31/12/1998 and penalty of Rs. 60,000/- under Rule 173Q.

4. During the oral submission ld. Counsel for the appellant pleaded that no proceedings can continue under compounded levy scheme after the omission of Section 3(A) of the Central Excise Act, 1944 and also Rule 96 ZQ. Reliance was placed on the Tribunals order in the case of Commissioner of Central Excise-Jaipur Vs. Alwar Processors Pvt. Ltd. reported in 2014 (308) ELT 720 (Tri-Del). On the other side, ld. AR contended that in view of the section 111 of The Finance (No.2) Act, 2009, there is no bar in continuing the proceedings notwithstanding the omission of Section 3(A). He also relied on the Honble Madras High Courts order in the case of Triveni Alloys Ltd. Vs. CESTAT, Chennai reported in 2014 (306) ELT 617 Mad. The Honble Madras High Court after detailed discussion and taking into consideration the provisions of The Finance (No.2) Act, 2009 held that the omission of section 3 (A) of Central Excise Act, 1944 is not a bar for continuing the proceedings.

5. Heard both the sides and examined the appeal on records.

6. Regarding the appellants contention of continuation of proceedings after omission of section 3 (A) it is clear that the Honble Madras High Court in the case of Triveni Ltd. (supra) has examined the issue and decided the matter. Accordingly, we proceed to examine the merits of appeal of the appellant and the department. The appellants is contention that the ld. Commissioner in the impugned order dated 18/01/2006 has not given any clear findings in respect of period from July, 1998 to December, 1998. He wrongly presumed that the date of filing declaration has been decided by the CESTAT as 1.1.1999.

7. It is clear from the perusal of records and as admitted in order-in-appeal dated 6.7.2000 the declaration filed by the appellant on 17.7.1998 is evidenced. Even in the impugned order of Ld. Commissioner (Appeals) he observed that declaration filed could not be traced by department and hence penalty cannot be imposed. It is also clear that the date declaration taken as 1.1.1999 by the ld. Commissioner is not correct and it is a mix up with the effective date of re-determination of ACP decided by the Tribunal. In the ex-parte order dated 21.1.2003 of original authority no specific discussion was found regarding date declaration or reason for confirmation of demand for the period prior to 1.1.1999. On appeal in the impugned order also no specific findings were recorded on these. The demands in show cause notices relating to the period prior to February, 1999 were issued on the ground that declaration was not filed by the appellant under Rule 96ZP. Since, the declaration dated 17.7.1998 filed by the appellant is not disputed, the duty liability has to be accordingly arrived at. The demands of duty made without reference to such declaration will not survive. Regarding appeal by the department on need for penalty for the period 1.7.1998 to 31.12.1998, it seen that as discussed above Ld. Commissioner, there is no finding by the Ld. Commissioner (Appeals) on duty liability for this period. He did not impose penalty on the ground declaration filed by the appellant could not trace by the department. It is settled that duty liability for this period is to be as per the declaration as discussed above. Considering this we find no merit in departments appeal for penalty.

8. The appeals are disposed of in the above terms.

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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