STEEL INDUSTRIES OF HINDUSTAN Vs. CCE

JUDGEMENT

(1.) M/s. Steel Industries of Hindustan have challenged the demand of duty and penalty confirmed against them by the Commissioner Central Excise (Appeals) under the impugned Order.

(2.) Shri Rajesh Chibber, learned Advocate, submitted that the Appellants manufacture Re -rolled products which attracted Central Excise duty under Section 3A of the Central Excise Act during the relevant period; that during the period from April 1998 to March 1999 their factory remained closed at different periods and some time for more than 15 days; that accordingly they had not deposited the amount of duty under the belief that they were eligible to the abatement of duty on account of closure of factory under Sub -section (3) of Section 3A of the Central Excise Act, read with Rule 96ZP of the Central Excise Rules, 1944; that they had filed abatement claims from time to time with the competent authority; that, however, they were issued a show cause notice proposing demand of duty on the ground that during April 1998 to March 1999 they were required to pay duty amounting to Rs. 22.70 lakhs whereas they had paid only Rs. 9,24,611 and accordingly they were asked to pay the differential duty which has been confirmed by the Additional Commissioner under Order -in -Original No. 15/2002 dated 7.5.2002 which has been upheld by the Commissioner (Appeals) under the impugned Order on the ground that the duty was payable on monthly basis which has not been discharged by them. The learned Advocate, further, submitted that the abatement claim filed by them has been remanded by the Appellant Tribunal to the proper authority for consideration the same and as their claim for abatement is still pending with the Department, duty ought not to have been confirmed against them; that as per Circular No. 331/47/97 -CE dated 30.8.97, if an Induction Furnace unit is continuously closed for not less than 15 days then the pre -payment of duty for the closure period is not to be insisted upon provided the unit fulfills all the conditions stated in Sub -rule (2) of Rule 96ZO of the Central Excise Rules, 1944. He contended that as their factory had remained closed for some time for more than 15 days they were not required to discharge the duty liability and then claim the abatement. The learned Advocate also relied upon the decision in the case of CCE, Chandigarh -II v. Dedar India Pvt. Ltd., 2003 (55) RLT 134 (CEGAT) wherein the Tribunal has held that the Commissioner must decide the eligibility of the Respondents to the abatement from payment of duty and then decide the liability of the assessee. Reliance has also been placed on the decision in the case of CCE, Meerut -1 v. Aradhna Steels and Alloys Industries P. Ltd., 2004 (62) RLT 22 (CEGAT) wherein the Tribunal has held that the Commissioner must decide the eligibility of the Respondents to the abatement from payment of duty and then decide the liability of the assessee. Reliance has also been placed on the decision in the case of CCE, Meerut -1 v. Aradhna Steels and Alloys Industries P. Ltd., 2004 (62) RLT 22 (CESTAT). The learned Advocate thus claimed that in view of these decisions of the Tribunal, the Commissioner should be directed to first decide the abatement claim filed by them before the duty is demanded from them.

(3.) Countering the arguments Shri O.P. Arora, learned SDR, submitted that as per provisions of Rules relevant at the time, the Appellants were required to pay duty in two equal instalments in a calendar month; that first instalment was to be paid latest by 15th of the month and the second instalment by last day of the month; that as such Appellants were required to discharge the duty liability first and then claim the abatement under the provisions of Rule and the same would be decided by the competent authority subject to the fulfilment of the conditions stipulated in the Act and the Central Excise Rules; that it is not open to the Appellants themselves to discharge the duty liability after deducting the amount of abatement which may be claimed by them. He also mentioned that in Didar Steel case the Tribunal has clearly observed that the abatement of payment of duty is available on the fulfilment of all the conditions specified in Central Excise Act; that neither Section 3A(3) of the Act nor Rule 96ZO of the Central Excise Rules empowers the Appellants to take the abatement on their own before making the payment of duty. He finally mentioned that it is not the case of the learned Advocate that the factory was closed all the times for more than 15 days and even in cases where the factory was closed for more than 15 days it is not known at the initial stage to the Appellants that the factory is going to be closed for more than 15 days and as such they have to discharge the duty on the fortnightly basis as provided in the Rules.