KAVERI ALLOY CASTINGS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we are of the view that the appeal itself should be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeal.

(2.) THE appellants are engaged in the manufacture of MS ingots [Chapter 72 of the CETA Schedule]. During the material period, they were working under Compounded Levy Scheme and discharging duty liability on the basis of the Annual Capacity of Production (ACP) determined by the jurisdictional Commissioner. Accordingly, they were liable to pay duty under Rule 96ZO(1) at the rate of Rs. 750/ - PMT from 1.9.1997. The Commissioner had determined their ACP and communicated the same by letter dated 3.4.1998, as per which the ACP was 3.5 MTS. That decision of the Commissioner was challenged before the Tribunal and, by Final Order No. 42/2004 dated 5.1.2004, this Bench directed the Commissioner to determine the ACP afresh after issuing a show -cause notice and hearing the party. Pursuant to the remand order, the Commissioner issued a show -cause notice dated 9.3.2004 to the party directing them to show cause as to why their ACP for the period 1.9.1997 to 30.9.1998 should not be determined as 11, 200 MTS. The proposal was contested. Learned Commissioner, in adjudication of the dispute, passed the impugned order fixing ACP of the party at 11,200 MTS for the aforesaid period as also demanding differential duty of Rs. 46,05,022/ - from them. A penalty of equal amount was also imposed on the party under Rule 96ZO ibid. Besides this, a redemption fine of Rs. 10,000/ -was also imposed on them in lieu of confiscation of the goods in question.

(3.) IN the present appeal filed against the above decision of the Commissioner, learned Counsel has sought to incorporate an additional ground, which was not mentioned in the memo of appeal. It is submitted that the Commissioner's proceedings beginning with show -cause notice dated 9.3.2004 are without the sanction of law inasmuch as Rule 96ZO was omitted by Central Govt. under Notification No. 6/2004 - CE (NT) dated 1.3.2001 and Section 3A of the Central Excise Act was omitted with effect from 11.5.2001 by Parliament under Section 121 of the Finance Act, 2001, both without any saving clause for protection of proceedings already initiated. In this connection, learned Counsel has relied on the Supreme Court's ruling in Kolhapur Canesugar Works Ltd. v. UOI - Learned Jt. CDR has opposed the counsel's plea by submitting that such a plea was not raised in the first round of litigation. We find force in this objection raised by learned Jt. CDR. The above plea was available to the party when we passed the remand order, but they chose not to raise it. On the other hand, they obtained a favourable order and enjoyed its benefit by submitting themselves to the jurisdiction of the Commissioner in the remanded proceedings. We are of the considered view that the appellants are estopped from raising the above plea at this stage. The plea for inclusion of additional ground stands rejected. Adverting to the case on merits, learned Counsel submits that, during the period of dispute, the appellants were working under Rule 96ZO(1) and, ipso facto, had the right to claim re -determination of ACP on the basis of actual production in terms of Sub -section (4) of Section 3A of the Act. It is submitted that this claim of the party was rejected on certain considerations, which were beyond the scope of the show -cause notice. Learned Counsel has particularly referred to paragraphs 11.1 and 11.2 of the impugned order and has submitted that learned Commissioner misunderstood a Chartered Engineer's certificate and recorded an erroneous finding that, though the power capacity sanctioned by the Electricity Board was only 900 KVA, power was overdrawn upto 1750 KVA by means of a separate transformer. On the basis of overconsumption of power, found by the Commissioner, a finding of overproduction was entered and the plea of 'lesser actual production' was rejected. Learned Counsel has relied on certificates issued by two other independent Chartered Engineers as also on a letter issued by the Electricity Board, besides RG -I Register and RT -12 Returns pertaining to the aforesaid period, in support of his plea that the actual production was far less than the ACP determined by the Commissioner. Reliance has been placed on the following decisions of the Tribunal: