COMMISSIONER OF CENTRAL EXCISE Vs. STAR ENTERPRISES

JUDGEMENT

(1.) The Revenue has filed this appeal against Order -in -Appeal No. 96/2004 dated 27 -2 -2004 by which the Commissioner (Appeals) has set aside the penalty against M/s. Star Enterprises.

(2.) When the matter was called no one was present on behalf of the Respondents in spite of notice being sent to them. However, they have submitted Cross Objection. Therefore, we heard Shri H.C. Verma, learned D.R. and considered the Cross Objection submitted by the Respondents. The learned D.R. mentioned that M/s. Star Enterprises manufacture Hot Rolled products which are chargeable to Central Excise duty on the basis of Annual Capacity of Production under Section 3A of the Central Excise Act; that on the basis of declaration dated 22 -8 -97 filed by them the Commissioner under letter dated 29 -8 -97 determined the Annual Capacity of Production on provisional basis; that subsequently the Respondents under their letter dated 1 -9 -97 informed about the change in 'd' value and submitted revised declaration for fixation of Annual Capacity of Production; that the Commissioner determined their capacity as 1053.020 M.T. w.e.f. 1 -9 -98 on provisional basis; that the Respondents also opted to avail the payment of duty under Sub -rule (3) of Rule 97ZP of the Central Excise Rules, 1944; that as per the said Sub -rule the manufacturer was required to pay the duty by the 10th of each month; that they had paid the duty short by Rs. 1,44,956/ - for the period April, 98 to March, 99; that accordingly the Dy. Commissioner under Order -in -Original No. 253/2000 dated 30 -10 -2000 confirmed the demand of duty and imposed penalty of equivalent amount on the Appellants; that on appeal, filed by the Respondents, the Commissioner (Appeals) under the impugned Order has given a finding that the Respondents had paid another Rs. 49,362/ - which was not considered by the Adjudicating Authority; that he, therefore, directed the Respondents to pay the remaining amount of Rs. 95,594/ -; that the Commissioner (Appeals), however, set aside the penalty on the ground that the Annual Capacity of Production was only fixed provisionally by the competent authority and as such penalty is not justified. The learned D.R. submitted that as per the provisions of Rule 96ZP(3) penalty is imposable, if an assessee does not make payment of the appropriate amount of duty within the stipulated period; that it has been held by the Allahabad High Court in the case of Pee Aar Steels (P) Ltd. v. CCE, Meerut, 2004 (170) E.L.T. 406 (Allahabad) that the penalty equivalent to the amount of duty short paid by them is imposable on the Respondents.

(3.) The Respondents have submitted in their Cross Objection that nonpayment of duty under provisional order and its recovery is not related to final duty liability determined; that the recovery/demand proceeding is action subsequent to the final fixation of duty liability; that therefore, the Commissioner (Appeals) has correctly and legally held that penalty is not imposable.