N.K.H. ALLOYS Vs. CCE

JUDGEMENT

(1.) The Appellant in their factory at Chandigarh Road, Ludhiana, manufacture non -alloy steel ingots falling under Chapter 72 of the Central Excise Tariff. During the period of dispute, i.e. during September 1997 to March 2000 period, they were discharging duty liability under compounded levy scheme under Rule 96ZO of the Central Excise Rules, 1944. On scrutiny of their RT -12 return from 9/97 - 3/2000 period, it was found that against these total duty liability of Rs. 1,55,00,000/ - during this period, they had paid Rs. 1,27,06,001/ - ( Rs. 37,74,194/ - during 9/97 - 3/98 period + Rs. 37,06,000/ - during 1998 -99 + Rs. 57,25,807/ - during 1999 -2000) resulting in short payment of Rs. 27,93,999/ -. Accordingly a show cause notice dated 29/8/02 was issued to the Appellant for recovery of duty under proviso to Section 11A(1) of the Central Excise Act, 1944 alongwith interest on this amount as per the provisions of Section 11AB and also for imposition of penalty under Rule 96ZO(3)(i) of Central Excise Rules, 1944, read with Section 11AC of the Act. The Appellant replied to the show cause notice pleading that the short paid amount represents the amount of abatement claims for the periods of closure of the factory which are pending with the Commissioner. The Commissioner vide order -in -original dated 30/04/04 adjudicated the above -mentioned show cause notice and confirmed duty demands of Rs. 2,25,806/ -, Rs. 4,46,533/ - and Rs. 46,774/ - for 1997 -98, 1998 -99 and 1999 -2000 respectively after adjusting the quantum of abatement allowed and besides this, imposed penalty of Rs. 4,93,307/ - under Rule 96ZO(3) ibid. The Appellant filed an appeal before CESTAT against the Commissioner's order dated 30/4/04 challenging the methodology of determining the amount of abatement and the Tribunal, vide order -in -appeal dated 30/4/04 remanded the matter for de novo adjudication with certain directions. The impugned order -in -original dated 5/9/05 has been paid by the Commissioner in de novo proceedings by which after redetermining the quantum of abatement, the duty demand of Rs. 2,00,384/ - for 1998 -99 and Rs. 46,238/ - for 1998 -99 and Rs. 26,238/ - for 1999 -2000 was confirmed and penalty of Rs. 2,46,620/ - was imposed on the Appellant under Rule 96ZO(3). The present appeal has been filed against this order of the Commissioner.

(2.) Heard both the sides.

(3.) AS regards the penalty the Appellant's pleas are that -