BALIA, J. - (1.) HEARD learned counsel for the parties.
(2.) IN this reference, the following question has been referred by the Central Excise and Gold Control Appellate Tribunal for decision by this Court as per the direction of this Court vide order dated 14. 7. 2003 in D. B. Civil Tax Reference Petition No. 4/2003:- " Whether the CEGAT can allow refund under Section 11b of Central Excise Act, 1944 when it was specifically not allowed by the sub-rule (2) of the rule 96zb of Central Excise Rules, 1944?" The facts leading to this reference are that the respondent assessee is engaged in the manufacturing of stainless steel pattas/patties which are subject to Central Excise Duty under Chapter 72 of the Central Excise and Tariff Act. The Question relates to levy of duty by the Revenue for the period of 3 months commencing from 1. 06. 1998 to 31. 08. 1998 as compounded duty in respect of cold rolling machines which were ceased to operate w. e. f. 29. 05. 1998 and were not in operation at any time during the said period. The respondent-assessee had two cold rolling machines for processing the aforesaid articles. Under Chapter E-VI of the Central Excise Rules 1944 for manufacturing of stainless steel pattas and patties the assessee availed the special procedure for levy of duty as envisaged thereunder. The Chapter E-VI of the Rules of 1944 contained the provisions from 96 ZA to 96 ZGG. This special procedure can be availed by the assessee in lieu of the provisions contained in the rules elsewhere for the period in respect of which the application is granted by the Commissioner. The application made by the assessee under Rule 96 ZA had been granted by the Commissioner and the assessee was availing the special procedure for payment of duty as per the said procedure for the period, the permission was granted, which has not expired. The assessee was permitted to avail the special procedure for payment of duty. Under Chapter 96 ZB, the duty is to be determined at the rate fixed per month or per year for each cold rolling machine as notified by the Central Government in this regard. Such rate is to be determined having regard to the average production of the stainless pattas/patties falling under Chapter 72 of the Schedule of Central Excise Tariff Act, 1985 per month or per year and other relevant considerations by the Central Government and as by notification in the official gazette such rates were determined from time to time.
(3.) ONE of the two cold rolling machines in respect of which the assessee was availing special procedure for payment of duty in terms of the Rules 96 ZB was dismantled on 29. 05. 1998, after intimating the Commissioner and seeking his approval. After 29. 05. 1998, only one cold rolling machine was in operation, thus, during the period in question only one cold rolling machine came to be operated for production, for which the assessee was to pay duty as per the special procedure. In the aforesaid circumstances, the assessee contended that w. e. f. 1. 6. 1998, he was liable to pay compound duty only in respect of one cold rolling machine which was in operation, at the rate prescribed at the relevant time for per month per machine. However, the competent authority was of the opinion that the assessee was required to pay Duty for 3 successive months even after the removal of one cold rolling machine at the compound rate in terms of sub-Rule (2)of Rule 96 ZB read with Rule 96ac and he, therefore, called upon the assessee to pay additional duty on that premise. The assessee paid such duty under protest but challenged the levy of such duty and applied for refund of such duty paid in excess by him. ;