MANDOVI METALS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) As the issue involved in this appeal, filed by M/s. Mandovi Metals Pvt. Ltd., is in very narrow compass we stay the recovery of the duty and penalty and take up the appeal itself for disposal with the consent of both the sides.

(2.) Shri J.S. Agarwal, learned Advocate, submitted that the Appellants manufacture M.S. Ingots which were chargeable to Central Excise duty under Section 3A of the Central Excise Act; that they had entered into a contract with the Government of Goa for uninterrupted power supply; that however, the State Government informed that the use of power would be restricted from 1st to 10th of every month; that on approaching the High Court the State Government was directed to restore the supply power as per the contract; that, however, the normal power supply was never restored and the same remained erratic; that consequently they were compelled to stop production and could manufacture Ingots only whenever there was power available; that they applied for abatement of duty; that the Commissioner under the impugned order has confirmed the demand of duty and imposed penalty besides demanding interest on the ground that as they had opted for payment of Central Excise duty under Rule 96ZO(3) of the Central Excise Rules/1944, the question of abatement being allowed does not arise; that the Commissioner has also relied upon the decision of the Supreme Court in the case of CCE v. Venus Casting Pvt. Ltd., 2000 (69) ECC 1 (SC) : 2000 (117) ELT 273 (SC) and UOI v. Supreme Steel and General Mills, 2001 (78) ECC 225 (SC); 2001 (133) ELT 513 (SC) wherein it has been held that a hybrid procedure under Rule 96ZO(3) in combination that the facility under Sub -section (4) of Section 3A cannot be availed of. The learned Advocate submitted that Rule 96ZO(3) does not debar any manufacturer to avail of the abatement of duty, if his factory remained closed for not less than 7 days continuously; that the Appellate Tribunal has held in the case of Malviya Steels Ltd. v. CCE, Jaipur, 2002 (49) RLT 41S (Cegat) that "the lower appellate authority has also not referred to any provisions which has led him to observe that the benefit of closure in a particular year will accrue to an assessee for fixing the ACP for the succeeding year.....Hon'ble Supreme Court in their judgment have observed that once an assessee exercised his option of paying duty under Rule 96ZO(3), he cannot go back to the provisions of Section 3A(4) which provides payment of duty on actual capacity of production.....; that the benefit of abatement from payment of duty for the period of closure of the mill is available to the Appellants". Reliance has also been placed on the decision in the case of Simran Metal Ltd, v. CCE, Patna, 2002 (53) RLT 423 (CEGAT) and Jindal Electro Casting P. Ltd. v. CCE, New Delhi, Final Order No. A/438/03 -NBC dated 27.8.03. Reliance has also been placed on the Ministry's Circular No. 331 /47/97 -CX dated 30.8.97.

(3.) Countering the arguments Shri V. Valte, learned SDK, reiterated the findings as contained in the impugned Order.