Commissioner of Central Excise vs Lakshmi Steel Rolling Mills Ltd.

Adarsh Kumar Goel, J.—The revenue has preferred this appeal u/s 35G of the Central Excise Act, 1944 against the final order No.

282/08-SM (BR) dated 25.1.2008 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, proposing following substantial

questions of law:

a. Whether the Respondent was bound to discharge its duty liability taking the Annual Capacity of Production of its mill to be 5018.305 MT per

annum on the basis of its actual production for the financial year 1996-97 in terms of Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity

Determination Rules, 1997, by the 10th of each month?

b. Whether the Respondent could pay lesser duty upon self determination of the Annual Capacity of Production of its mill, which is less than the

actual production of its mill for the financial year 1996-97, in view of the statutory provision of Rule 5 of the Hot Re-rolling Steel Mills Annual

Capacity Determination Rules, 1997?

c. Whether the manufacturer is bound to pay the duty during the pendency of litigation/appeal?

d. Whether penalty imposed under Rule 96ZP(3) upon a manufacturer of hot rolled products of non-alloy steel falling under Chapter 72 of the

schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and who opted to pay u/s 3A of the Central Excise Act, 1944 but failed to pay the

whole of the amount payable for any month by the 10th is mandatory or discretionary in nature?

The Assessee is manufacturing hot rolled products of non-alloy steel falling under Chapter 72 of the Central Excise Tariff Act, 1985 (in short

the Act"") and is holding Central Excise Registration Certificate No. 70/RRM/ MGG-1/94. In accordance with Section 3 of the Act declaration

was filed by the Assessee and Annual Capacity Production (ACP) of the Assessee was determined provisionally. On that basis, annual duty

liability of the Assessee was worked out. However, the Assessee did not pay the entire amount due and show cause notice for taking appropriate

action for default was duly issued and thereafter order-in-original dated 1.12.1999 was passed. On appeal against duty liabilities, the Assessee

succeeded. It was found that the duty already paid was in excess of the duty due. Accordingly, excess amount was refunded to it. Against the levy

of penalty which was upheld by the appellate authority, the Assessee approached the Tribunal and the Tribunal recorded a finding that the

Assessee having paid duty in terms of ACP order, there was no contravention of the rules. The Tribunal held that the Assessee having paid duty in

terms of ACP finally determined, there was no default and no ground for levy of penalty was made out. The said finding is as under:

After hearing both the sides and on perusal of the records, it is seen that Appellant paid the duty in terms of the ACP order dated 5th February

1998. The revenue also refunded the amount of duty as deposited by them earlier, consequent upon the order of the Tribunal. The ACP order was

finalised on 14/11/05 and the Appellant paid the duty with interest on 10/12/06. Thus, there is no contravention of the Rules on part of the

Appellant. Accordingly, penalty is set aside. The appeal is allowed with consequential relief.

We have heard learned Counsel for the revenue.

In view of the finding recorded by the Tribunal that the Assessee had met its liability and had not committed any default, no substantial question

of law arises.

The appeal is accordingly dismissed.