COMMISSIONER OF C EX Vs. ORIENT STEEL INDUSTRIES

JUDGEMENT

(1.) The matrix of the facts, culminating in the commencement and relevant for disposal of present appeal filed by the revenue and emanating from the record is that the respondent-assessee-M/s. Orient Steel Industries Limited (for brevity "the assessee") is engaged in the manufacturing of Hot re-rolled and flat rolled products of Iron or non alloy steel and was paying Central Excise duty at the rate of Rs. 300/- per metric tonne per month by availing the benefit of Compound Levy Scheme under Section 3A of the Central Excise Act, 1944 (for short "the Act") and Sub-rule 3 of Rule 96ZP of Rule 3 of the Central Excise Rules, 1944 (hereinafter to be referred as "the Rules"). The assessee ostensibly availed the benefit of abatement under Sub-section (3) of Section 3-A of the Act to the tune of Rs. 3,05,956/- for the period October and November 1998 and Rs. 5,25,117/- for the period January, 1999 to May, 1999.

(2.) The revenue claimed that the assessee did not pay the duty, therefore, show cause notices were issued as to why the duty short paid/not paid be not demanded under Section 11A of the Act and Rules alongwith interest. The imposition of penalty was also proposed under Rule 96ZP of the Rules. In the wake of show cause notices, the assessee filed the reply, in which it admitted the non-payment of duty, but tried to explain that the short payment was on account of difference of opinion, as the assessee claimed the relief for the period when its unit remained closed for more than seven days continuously under Section 3A(3) of the Act and this benefit could not be taken away by the Rules. According to the assessee that since there was conflict between the main Act and Rules, so the short payment was only on account of the difference of opinion.

(3.) The explanation of the assessee did not find favour and the Adjudicating Authority observed that the assessee had wrongly availed the abatement benefit in this case and negatived its claim, vide impugned order dated 25-10-2001 (Annexure PI), the operative part of which is, as under: