VIJAYA STEEL LTD. Vs. COMMISSIONER OF CENTRAL

JUDGEMENT

(1.) THIS appeal arises from Order -in -Original No. 2/04 dated 31.3.2004 confirming demands in terms of Rule 97ZP for the period September 1997 to March 2000 by appropriating the amounts already paid. This is a second ground of litigation. The Tribunal vide Final Order No. 1755/03 dated 30.12.2003 accepted the contention of the assessee that the assessments were provisional and directed the authorities to finalise the provisional assessment while determining the Annual Capacity of the Production (ACP) after affording due opportunity to the appellants. The Commissioner in the impugned order has differed on this point and has held that there was no provisionality requiring the assessments to. be finalized, as the then Commissioner of Central Excise, Bangalore -II vide Order No. 9/2000 dated 14.3.2000 had already fixed Annual Capacity of Production finally for the impugned period and there was no need to determine the same again. It is seen that the Revenue has not got the referred final order No. 1755/03 dated 30.12.2003 of the Tribunal. Hence, the remand order of the Tribunal holding that the assessments were provisional is required to be upheld now.

(2.) THE contention of the appellant is that the demands are not sustainable, as the Section 3A of the CE Act has been deleted with effect from 11.5.2001 without saving clause provided in Section 121 or any other Section of Finance Act, 2001 and therefore, the proceedings cannot be initiated and demands confirmed in terms of show cause notice in the impugned order. It is submitted that Rule 97ZO and Rule 97ZP are sub -ordinate legislation relatable to the parent provision viz., 3A and the same is obliterated from the statute board. The demands confirmed by the Commissioner are not sustainable in law. In this regard, the Tribunal ruling of West Zonal Bench (WZB) in the case of Mitra Steel and Alloys Pvt. Ltd. vide Order No. A/1444 -1446/WZB/2005 dated 12.8.2005, in an identical situation is relied, it is submitted that this ruling has again been followed in the case of Kundil Alloys Pvt. Ltd. v. CCE, Goa by Final Order No. A/1420 -1421/WZB/IB -CI dated 24.11.2005. It is submitted that as the Tribunal while remanding the case has clearly held that assessments were provisional and the Revenue has not filed a ROM or an appeal. Therefore, the Commissioner in the impugned order cannot proceed to hold that the assessment had already been finalized. Appellants relied on the judgment of Kanishk Steel Industries reported in 2005 (191) ELT 231, wherein it has been held that show cause notice issued prior to determination of ACP by the Commissioner are not sustainable. It is submitted that even if the appellant had not challenged the Order No. 9/00 dated 14.3.2000 under which as per the Department the ACP was determined finally, the appellants in collateral proceedings can challenge the order determining the capacity and since the order dated 14.3.2000 was issued without show cause notice and without affording an opportunity of hearing, the order is not legal and correct. The order of determination of ACP had also been passed without affording an opportunity of hearing to the appellant. Reliance is placed on Madras High Court ruling rendered in the case of Gemini Metal Works v. UOI and Ors. , wherein it has been held that even though appellants had not challenged the order of cancellation and the order was found to be correct for the reason of violations of principles of natural justice, then in such a circumstance, order can be challenged in collateral proceedings initiated on the basis of void order.

(3.) THE learned Counsel argued on the basis of this ground and on the other hand, the learned JDR relied on the findings of the Commissioner and submitted that the cited judgment of Mitra Steels (supra) has been appealed before the High Court. He also submitted that Mitra Steels (supra) pertain to Rule 97ZO and not to Rule 97ZP, although the charging section is 3A of CE Act. He filed detailed para -wise comment and prayed for extracting the same in the order. The same is extracted herein below.