1. These two appeals are against the order of the commissioner Central Excise. By this order, the Commissioner confirmed the demand for duty issued to Koshet Ispat Udyog Ltd. and imposed a penalty on it under rule 96Z(P) read with rule 9(2), 173Q(1) and 173G(1), demand interest and imposed a penalty on J.P. Jindal, managing director. These appeals are by the manufacturer and JP Jindal.
2. The contention of common counsel for the appellant on behalf of the manufacturer are as follows. The appellant's factory was not in production from 9.5.97 to 6.10.97. It had stopped producing any goods from 28.1.98. Therefore, that part of the Commissioner's order demanding duty on the production from 9.5.97 to 6.10.97 and from 28.1.98 to 31.3.98 cannot be sustained. For the remaining period the appellant ran only one of its two furnaces. Therefore the duty which was payable by it under Hot Re-rolling Steel Mills Annual Capacity Determined Rules 1996 should be only on the basis of the one furnace which was stated to be functioning.
3. The appellant, by its letter dated 6.10.97 intimated the Commissioner of its intention to avail of the compounded levy scheme as contained in rule 96Z(P). On the same date it gave details of its rolling mill, furnace etc. It had mentioned in the letter that it did not intend to made operational one of its furnaces which it had indicated as non-operational. The Commissioner, by his order dated 29.5.97 provisionally fixed the capacity of the furnaces. She had referred to the capacity of both mills, i.e. each of the furnaces for both mills. The appellant did not protest inclusion in this order of the second mill. This provisional order was finalised by the order dated 24.4.98 of the Commissioner. In this order the Commissioner has referred to both the mill s and fixing capacity of each of them. The counsel for the appellant agrees that there was no appeal filed against this order. The correctness of this order has not been questioned at all. the show cause notice issued to the appellant which has resulted in the absence of the order now impugned before us were solely on the basis that the duty required to be payable in accordance the final order determining the capacity and fixing the duty has not been paid.
When once the determination of the capacity of the two mills and the duty payable by such determination had not been challenged at any stage, we do not find it possible to agree that the demand for duty which was issued in implementation of the earlier order could now be questioned. We therefore do not find any case for the appellant regarding the duty liability on the second mill.
4. As to the period form 9.5.97 to 10.10.97, the Commissioner's order dated 24.4.98 has dealt that and disallowed it on the ground that the procedure which was laid down abetment was not valid. On 9.5.97 when the factory was finally closed the provisions of rule 96Z(P) were not in operation. The provision of section 3A of the Act, by providing the scheme of compound levy were made applicable to re-rolling mills with effect from 1.9.97. However, even if it was not covered by these provisions the appellant would still be required to intimate the department about the fact of cessation of production. Sub-rule (2) of rule 43 provides for a manufacturer to give notice to the Commissioner before stopping operation. No evidence is cited or substantiation of any officer has been produced before us. We are therefore unable to interfere with the decision to disallow abatement for this period.
5. The position however is different for the period commencing from 28.1.98. The reason advanced for denying the abatement is that the required particulars were not given. the letter dated 28.1.98 of the appellant, which was received next day by the inspector of Central Excise, intimates its intention not to manufacture any goods from that day and it indicates the electricity meter reading an also fact that there was no stock of semi finished or finished rerolling product. The requirement of sub-rule (2) of rule 96Z(P) have thus been satisfied.
The departmental representative raised the contention that the details of the electricity meter reading are written in ink suggesting that they may not have been enclosed in the original letter. This matter can be verified easily form the copy of the letter available with the department. So far as duty is concerned therefore we set aside the demand for the latter period and remand the matter to the Commissioner for adjudication afresh after taking into account the contents of the letter in accordance with law.
6. It is contended by the counsel for the appellant that no penalty was imposable under rule 96Z(P). The rule only came into enactment on 1.3.98 subsequent to the period. We see the correctness of the point.
The rule cannot be invoked fro the period in which it was not in statute. However prior to this date, the provisions of rule 173Q would apply. We do not find it possible to accept the contention of the counsel that even prior to enactment of 96Z(P), rule 173Q would not apply. the provisions of section 3A of the Act which he relies upon did not provide for framing rules for imposition of penalty. These rules provided for only fixation of annual capacity or rate of duty and calculation of such duty. we do not find it possible to say that imposition of penalty for non-determination of duty is extension of or a corollary to such assessment. We note the decision in Pioneer Silk Mills Pvt. Ltd. vs. CCE 1995 (80) ELT 507 holding that in the absence of a specific provision to this effect, both the provisions of the Central Excise Act and Rules could not be made application if the levy and collection of duty under Additional Duties of Excise (Goods of Special Importance) Act, 1957. Therefore in the period prior to enactment of a specific provision, the provision relating to the levy of duty in our view, the provision of rule 173Q would apply. We however set aside the penalty imposed ordering its redetermination depending upon the total duty the Commissioner may fix it payable.
7. Penalty has been imposed on JP Jindal, managing director under rule 209A. As evident from the order the appellant had communicated the relevant facts necessary to the department. Penalty has been imposed only on the ground of late payment of duty. This being the case we do not think penalty was imposable. On the facts of this case, we allow this appeal and set aside the penalty on him.
8. Appeal E/1377/00 allowed in part. E/1733/00 allowed. Consequential relief according to law.