M/S Standard Niwar Mills vs Cce, Kanpur

[Arising out of the Order-in-Original No. 08/Comm/MP/2004 dated 04/11/2004 passed by The Commissioner, Central Excise, Kanpur.]

For Approval and signature :

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

1. Whether Press Reporters 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 Standard Niwar Mills Appellant

Versus

CCE, Kanpur Respondent

Appearance

Shri Bipin Garg, Advocate  for the Appellant.

Shri M.S. Negi, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

Final Order No. 50904/2015 Dated : 11/02/2015

Per. Rakesh Kumar :-

The facts leading to filing of this appeal are, in brief, as under.

1.1 The appellant are manufacturers of processed cotton fabrics. The period of dispute in this case from January 1999 to June 1999. During this period, they had opted for payment of duty under Section 3A of Central Excise Act, 1944 readwith Rule 96 ZQ of Central Excise Act, 1944 under compounded levy scheme. The Commissioner vide order-in-original No. 58/Comm/ Tech/Processor/99 dated 02/6/99 had fixed their monthly duty liability on their annual capacity of production as Rs. 4,00,000/- per month and the appellant had discharged duty liability accordingly. However, a show cause notice dated 04/8/99 was issued to the appellant asking them to show cause as to why the compounded levy scheme facility should not be withdrawn and why the duty should not be charged on the basis of the actual production under Section 3 (1) of the Central Excise Act, 1944. The Commissioner vide order-in-original dated 07/6/2000 confirmed the differential duty demand of Rs. 43,25,593/- for January 1999 to June 1999 period by denying the benefit of compounded levy scheme of Rule 96 ZQ and beside this, imposed penalty of Rs. 1,00,000/- on the appellant.

On appeal being filed to Tribunal against this order, the Tribunal vide final order dated 23/3/01, remanded the matter to the Commissioner for re-quantification of duty holding that when the duty is charged on actual production by denying the compounded levy scheme, the assessee would be entitled for Modvat credit. The Tribunal also set aside the penalty on the appellant. In denovo proceedings, The Commissioner vide order-in-original dated 15/10/01 again confirmed the duty demand again without allowing the Modvat benefit and cum duty price benefit, but he also took into consideration the subsequent period from July 1999 to March 2000 during which while the appellant had paid the duty of Rs. 20,00,000/- for the period from July 1999 to November 1999. The matter again came to the Tribunal and the Tribunal vide final order dated 14/2/02 set aside the enhanced demand for July 1999 to March 2000 period  Rs. 10,53,717/- for which no show cause notice had been issued and remanded the matter to the Commissioner to verify the availability of deemed Modvat credit and pass appropriate order. Subsequently, the Tribunal vide miscellaneous order dated 19/7/02 modified its final order dated 14/2/02 holding that Modvat credit benefit would be admissible and directed the Commissioner to re-quantify the amount of duty demand.

1.2 In third round of adjudication the Commissioner vide order-in-original dated 18/7/03 re-quantified the duty demand by allowing the Modvat benefit, but restricted the quantification of duty for the period from January 1999 to June 1999 and did not adjust the excess duty paid in subsequent month. He also did not allow the cum duty benefit.

1.3 The matter came back to the Tribunal again and the Tribunal vide final order dated 03/8/4 remanded the matter to the Commissioner with directions to allow cum duty benefit.

1.4 In fourth round of adjudication, the Commissioner vide denovo adjudication order dated 29/10/04 allowed the cum duty benefit and also adjusted the payment of Rs. 4,00,900/- for the period from January 1999 to June 1999, but did not adjust the excess payment during July 1999 to November 1999. Against this order of the Commissioner, this appeal has been filed.

2. Heard both the sides.

3. Shri Bipin Garg, Advocate, the learned Counsel for the appellant, pleaded that the appellant even after June 1999 had continued to pay duty under compounded levy scheme @ Rs. 4,00,000/- per month, that during July 1999 to November 1999 period, the duty paid by them under compounded levy scheme was more than the duty payable on the actual clearances, and that in view of this, the excess duty paid by them should be adjusted against their duty liability for January 1999 to June 1999 period.

4. Shri M.S. Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner.

5. We have considered the submissions from both the sides and perused the records.

6. The dispute arose as while the appellant had opted for compounded levy scheme and their monthly duty liability had been fixed by the Commissioner vide order dated 02/6/99 as Rs. 4,00,000/- per month and during January 1999 to June 1999 period, the appellant discharged duty liability accordingly, but the Department, in August 1999, issued a show cause notice for withdrawal of the compounded levy scheme and charging duty on the basis of actual clearances and finally the Commissioner vide order-in-original dated 07/6/2000 withdrew the facility of compounded levy scheme and ordered levy of duty on the basis of actual clearances. In the fourth round of adjudication vide order-in-original dated 29/10/04, the Commissioner as per the earlier orders of the Tribunal, has permitted the Modvat credit and also has given the cum duty benefit. The only point of dispute which remains in that according to the appellant, since even after June 1999 they had continued to pay duty at compounded rate till it was withdrawn in June 2000 and since during July 1999 to November 1999 period, the duty paid by them at compounded rate was more than the duty liability on the basis of their actual clearances, the excess duty so paid should be adjusted against their duty liability for January 1999 to June 1999 period. In our view, if the duty paid under compounded levy scheme during July 1999 to November 1999 period was more than the duty payable by the appellant on the actual clearances made by them and, as such, there was excess payment of duty during this period, the same has to be adjusted against their duty liability for the period from January 1999 to June 1999. Accordingly, the matter is remanded to the Commissioner for re-quantification of the duty demand on this basis.

(Operative part of the order pronounced in the open court.)

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

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