M/S. JUPITER INDUSTRIES Vs. CCE, JAIPUR

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of stainless steel Pattas/Patties which are liable to Central Excise duty. They opted for payment of Central Excise duty at compounded rates as fixed under Central Excise Rule 96ZA. They had two cold rolling machines and they were paying duty in respect of both. One of the machines was dismantled on 29.5.98 after obtaining permission. However, the authorities directed them to continue to pay duty in respect of that machine also at the compounded rate for 3 more months under Rule 96 ZC (3) and this order was complied with. Later on they claimed refund of the duty relatable to the dismantled machine. That claim was rejected by the lower authorities on the ground that duty had been correctly demanded and paid in terms of Rule 96ZB(2) of the Central Excise Rules. Hence the present appeal.

(2.) AS against the above submissions of the learned Consultant representing the appellants, ld. DR has submitted that the provisions of Rule 96ZB relating to discharge of liability for duty on payment of certain sum are cleared. He has pointed out that Sub -Rule (2) of that Rule has laid down that the sum payable under Sub Rule (1) of Rule 96ZB shall be calculated by application of such rate to the maximum number of cold rolling machines installed by a manufacturer at any time during 3 calender months immediately preceding the calender month in which the application under Rule 96ZC is made. He pointed out that Sub -Rule (3) of the said Rule further laid down that the sum calculated in terms of Sub -Rule (2) shall be tendered by such manufacturer. The learned DR, therefore submitted that no refund was permissible in the present case.

(3.) COMPOUNDED levy is a special procedure for payment of Central Excise Duty where under a manufacturer discharges the duty payable on the excisable goods manufactured by him by making payment of amounts fixed per machine under the relevant Central Excise Rules. The rates per machine are fixed under Notifications issued in terms of Rule 96 ZB having regard to the average production per machine. Sub -Rule (2) of that Rule laid down the method of calculation of sum payable. These Rules, in no way stipulate that any sum at the compounded rate is payable towards duty of a machine which is not in existance with the manufacturer. Nor do they say that no refund claim can be made with regard to excess payment made. Central Excise refund claims are made in terms of Section 11B of the Central Excise Act. That Section laid down that any person claiming refund of any duty of excise may make an application for refund of such duty to the Asstt. Collector and that, if the asstt. Collector is satisfied that all or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly. It is clear from Rule 96ZA that Pattas/Patties manufacturers can opt for the special procedure. Rule ZB stipulates that duty liability can be discharged by payment of certain sum. Sub -Rule (2) of Rule 96ZB deals calculation. None of these Rules contemplates payment of duty after a machine has been dismantled and production or the machine discontinued. There is no bar also contained in the special procedure rules or in section 11B prohibiting refund of excess duty paid by an assessee working under the Special procedure Rule. In the present case there is no dispute that the machine was dismantled on 29.5.1998. Despite that, duty was ordered to be paid in respect of the dismantled machine for 3 months i.e. June 98 to August 98. This payment was clearly n excess of the sum payable under Compounded Levy Scheme. That amount is refundable in terms of Section 11B of the Central Excise Act. The Lower Authorities were in error in holding that he refund was not permissible in terms of Rules relating to Special Levy. Therefore, the Orders denying the refund are required to be set aside. I do so. The appeal succeeds and is allowed with consequential relief to the appellants. The amount collected in excess shall be refunded to the appellant forthwith.