Judgment:
1. The appellants were issued a show cause notice dt. 24.9.98 in which it was alleged that since they had opted to avail the Scheme under sub-rule (3) of Rule 96 ZO for full and final discharge of duty liability for the manufacture of ingots of non-alloy steel under Section 3A of Central Excise Act, 1944, therefore, they were required to pay the Central Excise duty @ Rs. 750/- PMT under Sub-rule (1) of this rule. Accordingly, they were called upon to show cause why the duty amount of Rs. 5,58,221/- for the period form September, 1997 to March, 1998 should not be recovered from them under Section 11A and why a penalty should not be imposed on them under rule 209A. On consideration of the reply of the party, the Commissioner of Central Excise & Customs, Jaipur in his Order dt. 14.7.99 confirmed a duty of Rs. 5,58,221/- on the appellants under Section 11A.2. The present appeal is against the above order of the Commissioner.
The matter is listed today for hearing the Stay Petition filed by the appellants. I have heard Shri K.K. Anand, Advocate for the appellants and Shri M.D. Singh, SDR for the respondents. The ld. Advocate for the appellants submits that they had made detailed submissions before the Commissioner who had earlier subjected them to duty on the compounding rates determined by him vide his Order dt. 29.9.97. They had submitted that they cannot be subjected to duty at compounded rates under this Scheme as they had not produced any non-alloy ingots since the introduction of the compounded levy scheme and had produced only the stainless steel ingots except for the month of September, 1997. They had also submitted that since their annual capacity of production was determined by the Commissioner on the provisional basis, they did not file an appeal against his Order dt. 29.9.97 subjecting them to compounding rates of duty. It is also argued that they wee compelled to pay the duty at the compounding rates which is against the provisions of Notfn. No. 43/97, and there is also a factual mistake in the show cause notice but their submissions have received no consideration in the Order of the Commissioner. It is therefore contended that since they are not liable to pay the duty at the compounding rates for the month of September, 1997, the confirmation of the demand of the impugned amount is against the provisions of the law and is liable to be set aside. The ld. Advocate for the appellants also pleads financial hardship on the part of the appellants for which the relevant papers including the balance sheet for the Year, 1998 are also submitted. Shri M.D. Singh, SDR for the respondents on the contrary contends that admittedly their annual capacity of production is determined by the Commissioner under the compounding levy scheme and they had also paid duty at the rates so determined, without filing any appeal against such order. The Commissioner has confirmed that duty only for the month of September, 1997 and the demand for the rest of the period has been dropped. He therefore, states that there is no infirmity in confirmation of the demand in the order of the Commissioner. I have considered the submissions made before me. The Commissioner has determined their annual capacity of production of the appellants for the year 1997-98 vide his Order dt. 29.9.97 and since this matter was not agitated further by them, I am of the view that this order prima facie has achieved finality and the party was required to pay duty in terms of this order albeit provisionally. However, since the legal position appears to be contentious which can only be gone into at the time of final hearing of the appeal, the appellants have not made out a prima facie case in their favour. Keeping in view their financial position, they are directed to make a deposit of Rs. 3,00,000/- (Rs. Three lakhs) on or before 18.4.2001. On making such deposit , the balance amount of the demand confirmed on them shall stand waived and its recovery stayed till the disposal of the appeal.