Case Law Details
Hazra Iron Works Vs Commissioner of Central Excise (CESTAT Kolkata)
Appellant has not paid the duty as per the ACP (Annual Capacity of Production) fixed by the Commissioner for the years 1997-1998 and 1998-1999. The Appellant’s contention is that they have not opted for payment of duty under 96ZP(3) and hence they are liable to pay duty under Rule 96ZP(1) only. Once their request for payment of duty under 96 ZP(1) is accepted, they are eligible to pay duty on the basis of actual production in terms of the provisions of Section 3A(4) of the Central Excise Rules, 1944. Their actual production is much less than the capacity determined by the Commissioner and they have paid duty as per the actual production and hence the differential duty demanded is not sustainable.
As per Section 3A(4) of the Central Excise Rules, 1944, when an assessee claims that their actual production is lower than the ACP determined by the Commissioner, then the Commissioner has to determine the actual production and re-determine the amount of duty payable on the basis of such actual production. This re-determination has to be done by the Commissioner based on the evidence produced by the assessee to show that their actual production is much less than the ACP fixed. However, we find that in the present case, the Appellant has not submitted any evidence before the Commissioner for re-determination of the ACP and fixing of the duty based on actual production. In the absence of any redetermination done by the Commissioner, the ACP fixed by the Commissioner @ 1106.82 MT per annumremains and the assessee needs to pay duty as per ACP fixed. In the instant case, we find that the assessee has paid duty based on actual production and not on the basis of ACP fixed. Hence, we find that the differential duty demanded and confirmed by the Impugned Order is sustainable.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The briefly stated facts of the case are that the Appellant is a manufacturer of hot re-rolled products of non alloy steel falling under Chapter Heading 7214.90 of the Central Excise Tariff Act, 1985. On the basis of the declaration filed by the Appellant on 28/08/97, the Annual Capacity of Production (ACP) of the Appellant was provisionally fixed as 587.83 MT. Subsequently, the Appellant submitted Chartered Engineers Certificate vide letter dated 01/05/1998, based on which the ACP was revised as 1055.435 MT. Thereafter a joint verification was done on 12/04/2000, to verify the correctness of the declared parameters and some differences were observed. On the basis of the verified parameters, the ACP was finally fixed as 1106.82 MT. As there was no change in the plant and machinery from Sept 1997 to 12/04/2000, the parameters found in joint verification was declared as correct and accordingly the Appellant was asked to pay duty as per the final ACP of 1106.82 MT, fixed.
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