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Star Metal Industries v/s CCE Chennai

    Appeal No.E/734/2005

    Decided On, 07 April 2008

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai


    Shri N.S.M.Mohd.Jayarullah, Advocate. For the Appellants. Shri N.J.Kumaresh, SDR. For the Respondents.

Judgment Text

P.G. Chacko, Member (Judicial)

The appellants were engaged in the manufacture of 'Aluminium Circles' (Heading 76.06 of the CETA Schedule) during the material period, during which there was a special scheme for levy of duty of excise on the said goods vide Rules 96ZA to Rule 96ZGG of the Central Excise Rules, 1944. The appellants had opted to work under that scheme and, accordingly, they were liable to pay duty @ Rs.17,500/- per month for the period from 30.7.97 to 30.6.98. But they paid duty of only Rs.75,300/- for this period. Therefore, in adjudication of a show-cause notice dated 9.10.98, the original authority demanded differential duty of Rs.1,34,700/- from the party and imposed on them a penalty of Rs.2,000/-. Aggrieved by the decision of that authority, the party preferred appeal to the Commissioner (Appeals) which was rejected on merits. The appellate authority also rejected the plea of time-bar raised by the party. The present appeal of the party is directed against the order of the appellate Commissioner.

2. The only ground raised in this appeal is that a major part of the differential duty demanded by the lower authorities is time-barred in terms of Section 11A of the Central Excise Act and that the recoverable amount of duty is only Rs.29,700/-. There is no other challenge. After hearing Counsel for the appellants and SDR for the department, I find that the plea of limitation raised by the appellants is not tenable inasmuch as the Tribunals Larger Bench in the case of Mohinder Steels Ltd. Vs CCE Chandigarh, 2002 (145) ELT 290 (Tri.-LB) ruled out the applicability of the limitation provisions of Section 11A of the Act to recovery of duty in arrears under a Compounded Levy Scheme. Admittedly, the appellants were also working under the Compounded Levy Scheme prescribed for Aluminium Circles. That scheme contained specific provisions for determination and collection of duty of excise on the above goods. It also contained provisions for recovery in the event of default. No time-bar was prescribed for such recovery. In the circumstances, the ratio of the Larger Bench decision relating to the Compounded Levy Scheme for Hot Re-rolling Steel Mills would squarely be applicable to the instant case.

3. It appears from the memo of appeal that the appellants had, at some point of time during the period of dispute, approached the jurisdictional Assistant Commissioner with a proposal to opt out of the above scheme. The proposal, however, was not acceptable to the department. Though this aspect does not figure nowhere in the grounds of appeal, the appellants' counsel has made a mention of the same. In this connection, ld.SDR has invited my attention to apex courts judgments in the cases of Commissioner Vs Venus Castings (P) Ltd., 2000 (117) ELT 273 (SC) and Union of India Vs Supreme Steels and General Mills, 2001 (133) ELT 513 (SC), wherein it was held that, for a manufacturer who opt to work under Compounded Levy Scheme in a given financial year, it was not open to claim a switch-over to actual production-based duty levy scheme under Section 3A (4) of the Central Excise Act midway in that year. The Asst.Commissioner's decision declining the partys request for permission to opt out of the sc

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heme is supported by case law. Ld.counsel also has made mention of requirement of payment of interest on duty but the records do not indicate that any interest amount was demanded by the authorities. Even otherwise, this aspect is also missing in the grounds of appeal. 5. In the result, the impugned order is sustained and this appeal is dismissed.