MANDOVI METALS PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, GOA
LAWS(CE)-2015-4-18
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on April 07,2015

Mandovi Metals Pvt. Ltd. Appellant
VERSUS
Commissioner Of Central Excise, Goa Respondents


Referred Judgements :-

BATA STEEL PUT. LTD. V. COMMISSIONER OF C. EX.,CHANDIGARH [REFERRED TO]
COMMISSIONER OF CENTRAL EXCISE VS. DAKSH STEELS PVT. LTD. [REFERRED TO]


JUDGEMENT

RAMESH NAIR,MEMBER (J) - (1.)THIS appeal is directed against Order -in -Original No. 16/Commr. Goa/Cx/2004, dated 20 -1 -2005 passed by the Commissioner of Customs & Central Excise Goa, wherein total demand of Rs. 54,04,368/ - was confirmed in terms of Rule 96ZO(3) of the Central Excise Rules, 1944. A penalty of equal amount and interest on the demand was also confirmed. The fact of the case is that the appellant is engaged in the manufacture of mild steel ingots falling under chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant filed declaration dated 10 -11 -1997 with the Commissioner of Central Excise, Goa for availing the scheme of payment of Central Excise duty as provided under Rules 96ZO(3) of the Central Excise Rules, 1944. According to such provision appellant was required to pay Central Excise duty on the basis of the Annual Capacity of production under Section 3A of the Central Excise Act, 1944. During the period October, 1997 to March, 2000 in terms of above provision the Commissioner has fixed Annual capacity of the production of the assessee vide letter F. No. V/30/16(k)/97 -CX.I dated 18 -3 -1998 and according to such fixation capacity of the induction furnace installed in the appellant's factory was fixed at 3 M.T. and accordingly appellant is required to pay Central Excise duty of Rs. 5 lakhs per month. Since the appellant did not nay full amount of Central Excise duty during the period of October, 1997 to March, 2000, five show cause notices were issued demanding total duty of Rs. 54,04,368/ -. In the first round of adjudication the authority vide order -in -original No. 10/Commissioner Goa/CX/2003 dated 31 -3 -2003 confirmed demand and imposed penalty. Aggrieved by the said order dated 31 -3 -2003 the appellant filed appeal before the CESTAT Mumbai, CESTAT vide their order No. 790/2003 -B and stay order No. 338/2003 -B both dated 13 -10 -2003 remanded the matter to the Commissioner for considering the abatement claim filed by the assessee. In the de novo adjudication the Commissioner once against confirmed the demand and imposed penalty and interest vide impugned order dated 20 -1 -2005, therefore appellant is before us. Shri S. Sunil, ld. Counsel for the appellant submits that the ld. Commissioner has wrongly rejected the abatement claim of the appellant on the ground of non fulfillment of procedural requirements. He submits that the appellant had intimated the department regarding the closure of the factory as well as restarting of production. The appellant also submitted that electricity bill for the relevant period which justifies fact that factory was remained closed. It is his submission that there is no denial by the ld. adjudicating authority regarding the closure of the factory but he denied the abatement only on the ground that particular hours on which the factory stopped production and started production were not intimated to the department. He submits that there is no charge by the department that the appellant factory has produced ingots during the period of closure. He also submits that Goa Bench of Hon'ble High Court had acknowledged in it's order the fact that 20 days for every month there was no power supply in the factory. In the Hon'ble High Court order dated 12 -6 -1998 while discussing writ petition of the appeal disclosed that ld. Advocate acknowledged the fact that power supply cut to the appellant factory. This vital fact was available on record before ld. Commissioner and same was recorded in the impugned order. Despite all these undisputed fact and evidences, ld. Commissioner went on rejecting the claim of abatement to the appellant, merely on the ground that particular hours when the factory has closed and re -commenced had not been intimated to the department. It is his submissions that even though particular hours of closure and re -commence of the factory has not been intimated to the department but on basis of other corroborative evidences such as intimation given to the department, electricity bill and Hon'ble High Court judgment go on proving that from which date to which date and hours factory remained closed. In such a situation merely for non intimating the particular hours can not be reason for denial the abatement. In support of his submission he placed reliance on this Tribunal judgments in the case of Bata Steel Put. Ltd. v. Commissioner of C. Ex., Chandigarh [2007 (219) E.L.T. 539 (Tri. -Del.)] and Commissioner of Central Excise, Kanpur v. Daksh Steels Pvt. Ltd. [ : 2004 (178) E.L.T. 446 (Tri. -Del.)]. He submits that in view of the above facts the appellant is entitled for the abatement and appeal may be allowed.
On the other hand, Shri V.K. Shastri, ld. Asst. Commissioner (AR) reiterates the findings of the impugned order.

(2.)WE have carefully considered the submissions made by both the sides and perused the record. The issue to be decided by us is whether in the facts and circumstances of the case, the appellant is entitled for abatement as provided under Section 3A of the Central Excise Act, 1944. During the closure of the appellant factory, it is observed that the ld. Commissioner has rejected the claim of the appellant on the ground that even though the appellant had informed the department about closure of the unit on particular date and starting of the production on particular date but failed to inform the department as to the period for which the unit was continuously closed from particular hours of particular day to particular hours of particular day. In this regard we have perused the relevant documents such as intimation given to the department electricity bill, High Court order and find that the appellant vide letters intimated the department from time to time regarding closure of the production in their factory. The appellant vide letter dated 25 -11 -1997 intimated to the Range Superintendent that furnace remained closed from 22 -11 -1997 due to fault, vide letter dated 1 -12 -1997 similar intimation was given to the Commissioner, vide letter dated 18 -12 -1997 intimated, the furnace remained closed on 18 -12 -1997, vide letter dated 29 -12 -1997 intimated furnace was remained closed from 20 -12 -1997 and now it is ready for production from toddy, vide letter dated 22 -2 -1998 it was informed to the Asstt. Commissioner that the furnace is going to remain closed due to technical problem of furnace, vide letter dated 9 -2 -1998 it was intimated to the Commissioner that the furnace remain closed and now it is ready for production from today. Vide letter dated 9 -3 -1998 informed to the Asstt. Commissioner that furnace is remained closed. Vide letter dated 16 -3 -1998 it was informed to the Asstt. Commissioner the furnace was remain closed and now it is ready for production from today. Similarly, the appellant was regularly intimating the department regarding the closure of the production from time to time throughout the period involved in this case. In some of the intimation letter dated 15 -3 -2000, 24 -3 -2000 the appellant has intimated not only date of closure but also hours. The appellant also submitted the statement of closure and starting of furnace showing date and time and number of days of closure. We also gone through the letter from the electricity department wherein it can be seen that there was power restrictions imposed on the appellant's factory. This also goes on proving that factory remained closed as intimated by the appellants from time to time. As pointed out by the ld. Counsel it is seen from the Hon'ble Bombay High Court at Goa bench judgment in the case of appellant in writ petition No. 219/98, dated 12 -6 -1998 that there was no supply of electricity. Relevant para of the judgment is reproduced below:
"Upon notice, we heard Mr. Nadkarni, learned Advocate General. According to him, the Government had to take this decision of power cut because of the peculiar situation. He narrated that the total energy per day available is 10,000 KVA. The Government accordingly entered into a contract to supply to the petitioner 3,500 KVA. However, owing to the opening of six new industries the Government now is not in a position to maintain supply as agreed. The impugned communication was therefore, issued".

From the above undisputed fact it is observed that the appellant indeed, have been intimating to the department from time to time vide various correspondences regarding the closure and restarting of the production in their factory. Ld. Commissioner's finding for rejecting the claim of abatement is boiled down on only one aspect that is during intimating closure of the production and restoring of the production the appellant has not intimated hours. In our view if hours of particular date was not declared by the appellant but if date is intimated it can be taken as from 0000 hours of that particular date. Therefore in our considered view merely because hour of date of closure of production and restoration of production in the communication is not mentioned the same cannot be the reason for denying the abatement. Ld. Counsel has placed reliance in cases of Bata Steel Pvt. Ltd. v. Commissioner of C. Ex., Chandigarh (supra) and Commissioner of Central Excise, Kanpur v. Daksh Steels Pvt. Ltd. (supra) we find that the ratio of both the judgments are squarely applicable in facts of the present case. From the facts, such as intimations given by the appellant from time to time to the department, correspondence of the electricity department and the facts narrated in Hon'ble Bombay High Court at Goa bench there is no dispute that production of the appellant factory remained closed during the period declared by them to the department and this fact also not disputed by the ld. Commissioner.

3.1 Therefore in view of undisputed factual position we are of the considered view that appellant is legally entitled for abatement and accordingly the demand is not sustainable. We therefore set aside the impugned order and allow the appeal of the appellant with consequential relief, if any, in accordance with law. Misc. Application for urging additional grounds also stands disposed of, accordingly.

(Operative part pronounced in Court on 7 -4 -2015)

;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.