KANGRA STEEL PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) In this writ petition filed under Articles 226/227 of the Constitution of India, the petitioner has prayed for issuance of a writ in the nature of certiorari for quashing Rule 96ZO(3)(ii) of the Central Excise Rules, 1944 (in short "the Rules") being ultra-vires of the Rule making power of the respondent. Further prayer has been made for quashing order dated 13.5.2010 (Annexure P-10) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal"). The facts necessary for adjudication of the instant writ petition as narrated therein are that the petitioner is engaged in the manufacturer of non-alloy steel ingots/billets falling under sub-heading No. 7206.90 of First Schedule to the Central Excise Tariff Act, 1985. During the period in question, the petitioner was covered under Compound Levy Scheme and was required to pay lump sum amount on the basis of capacity instead of actual production of the goods. Further, as per Rule 96ZO(3) of the Rules, the petitioner was also liable to pay penalty equal to the amount of duty outstanding. The Commissioner vide order dated 3.11.1997 (Annexure P-1) determined the annual capacity of induction furnace of the petitioner. As the actual production of the petitioner was less than the capacity determined by respondent No. 2, the petitioner vide order dated 28.3.1998 (Annexure P-2) opted to pay the duty in terms of Rule 96ZO(1) of the Rules. The petitioner also requested respondent No. 2 to permit clearance of goods @ Rs. 750/- per MT. The petitioner filed CWP No. 1163 of 2000 before this Court and this Court vide order dated 31.1.2000 (Annexure P-3) directed the respondents to determine its actual production and thereafter compute excise duty on that basis. It was further directed that the department would be free to compute the excise duty on the basis of annual capacity production but would recover duty only on the basis of actual production. Thereafter, vide letter dated 21.3.2000 (Annexure P-4) the petitioner was directed to deposit a sum of Rs. 5,49,360/- as a difference between the duty paid and duty payable as per actual production. This Court vide order dated 14.7.2000 (Annexure P-5) vacated the interim order and also disposed of the writ petition vide order dated 19.8.2000 (Annexure P-6). However, the department issued five show cause notices to the petitioner raising the demand of Rs. 2,27,000/- per month on the basis of capacity of production determined. To avoid interest and penal action, the petitioner deposited a sum of Rs. 45,70,500/- and interest amounting to Rs. 8,45,000/-. The adjudicating authority vide order dated 13.7.2004 (Annexure P-8) confirmed the demand of Rs. 52,08,952/- and also imposed penalty of an equal amount. Feeling aggrieved, the petition filed an appeal before the Commissioner (Appeals) who vide order dated 17.9.2004 (Annexure P-9) allowed the appeal and dropped the demand. Being dissatisfied, the department filed an appeal before the Tribunal. The Tribunal vide order dated 13.5.2010 (Annexure P-10) set aside the order of the Commissioner (Appeals) and restored that of the adjudicating authority. Hence, the present writ petition.

(2.) Learned counsel for the assessee relied upon the decisions of the Gujarat High Court in Krishna Processors v. Union of India, 2012 280 ELT 186(Guj.) and that of Himachal Pradesh High Court in Shubh Timb Steel Ltd. v. Union of India, 2012 286 ELT 495(HP) wherein following the judgment of this Court in Bansal Alloys & Metals Pvt. Ltd. v. Union of India, 2010 260 ELT 343(P&H), the issue has been decided in favour of the assessee.

(3.) On the other hand, learned counsel for the revenue supported the order passed by the Tribunal.