Roma Steel Industries vs The Commissioner of Central Excise

Archana Wadhwa, Member (J)

The prayer in the application is that dispensing with the condition of pre-deposit of duty amount of Rs. 71,050/- confirmed against the appellants for the period December 1998 to June 1999. In addition, personal penalty of Rs. 30,000/- has also been imposed upon the appellants. The said duly has been confirmed by the authorities below, as a consequence of the annual capacity of production fixed by the Commissioner in terms of the Section 3A of Central Excise Act, 1944 and the Rules made there under.

Ld. Consultant appearing for the appellants fairly concedes that the said duty liability arises in terms of the ACP fixed by the Commissioner which was 2048 MTs. The said order of the fixation of ACP by the Commissioner was not challenged by the appellants and, as such, had attained finality. Further he submits that subsequently their factory was sold to M/s. Shital Ispat Pvt Ltd., who took over with effect from July 1999. On an application by M/s. Shital Ispat Pvt Ltd., the Commissioner subsequently fixed the annual capacity of production as 1234 MTs. It is the contention of the Ld. Consultant that subsequently fixed ACP was on the same parameters and, as such, reflects upon the fact that earlier ACP fixed was not correct. As such, he submits that the ACP fixed subsequently by the Commissioner in the case of M/s. Shital Ispat Pvt Ltd., should be adopted for the purposes of the calculation of duty against them, at least for the period April 1999 to June 1999.

Countering the arguments, Ld. DR Shri. S.V. Parelkar, submits that the impugned order is only quantification of the duty, which the appellants were liable to pay as a consequence of fixation of ACP by the Commissioner. The said ACP having been accepted by the appellants, during the relevant period, had attained finality and the appellants cannot be heard to say that the new capacity fixed in respect of the new unit should be taken into account.

After hearing both sides, we find force in the submissions of the Ld. DR. The duty amount stands confirmed against the appellants only as a result of quantification of the duty in terms of the ACP fixed by the Commissioner. Ld. Consultant has fairly conceded that the earlier ACP fixation order is followed, then the appellants are liable to pay the entire amount of duty. Having already observed that prima facie the appellants are required to follow the order of the Commissioner fixing the ACP in their own case, we hold that the appellants does not have any prima facie case in their favour. Accordingly, we direct them to deposit the entire amount of duly within a period of eight weeks from today and report compliance on 21/06/2005.

Inasmuch as a very short point is involved, we are of the view that the appeal itself can be disposed of on the said date. We also make it clear that during the pendecy of the appeal the recovery of penalty is stayed.