Gujarat Electromelt Ltd. Vs. Cce

Gujarat Electromelt Ltd. vs Cce

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Nov 25, 2003

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Citation: sooperkanoon.com/33211
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: K Usha, N T C.N.B.
Decided On: Nov 25, 2003
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Gujarat Electromelt Ltd.

Respondent

Cce

Legal References

Reported In: (2004)(112)LC662Tri(Mum.)bai

Excerpt

.....capacity of production. they had opted for such payment under rule 96zo(3) of the central excise rules. under the impugned order the central excise authorities have demanded duty on the basis of capacity of machinery installed in the appellant's factory.2. the appellant has challenged the above demand on the ground that diesel generating (dg) set installed in the appellant's factory had broken down and was not functional leading to non-operation of one mill. appellant claims that no duty should be demanded in respect of that mill during the period of non-production. it is the appellant's contention that production capacity means the effective production capacity and installed capacity means purposeful installation of machinery. during the hearing of the case, learned advocate of the appellant emphasized that since the dg set was not generating electricity during the relevant period, the installed capacity of the machinery had to remain idle and any demand for this idle period of machinery would be unjust.3. the appeals challenge sub-rule (3) of rule 96zo as ultra vires the rule making power of the central government under section 37 of the central excise act, 1944. para 1 of the appeal memorandum reads as under: 1. the appellant by way of this appeal challenges the sub-rule (3) of rule 96zo framed under section 37 of the central excise act, 1944 as being ultra vires the rule making power of the central government under section 37 of the said act of 1944 on the ground that it runs contrary to and is framed in violation of mandatory provisions and the scheme reflected in section 3-a of the central excise act, 1944 and further challenges order-in-original no. 10/commr ahmd-ii/98 dated 1.5.1998 issued on 4.5.1998 passed by commissioner of central excise, ahmedabad ii and two showcause notices as being illegal, without jurisdiction, without authority of law and passed contrary to the provisions of statutory provisions and ignoring the relevant considerations and.....

Full Judgment

1. Appellants are manufacturers of ingots and billets of non-alloy steel. They were liable to central excise duty at compounded rate. The rate depended upon the installed capacity of production. They had opted for such payment under Rule 96ZO(3) of the Central Excise Rules. Under the impugned order the Central Excise authorities have demanded duty on the basis of capacity of machinery installed in the appellant's factory.

2. The appellant has challenged the above demand on the ground that Diesel Generating (DG) set installed in the appellant's factory had broken down and was not functional leading to non-operation of one mill. Appellant claims that no duty should be demanded in respect of that mill during the period of non-production. It is the appellant's contention that production capacity means the effective production capacity and installed capacity means purposeful installation of machinery. During the hearing of the case, learned Advocate of the appellant emphasized that since the DG set was not generating electricity during the relevant period, the installed capacity of the machinery had to remain idle and any demand for this idle period of machinery would be unjust.

3. The appeals challenge Sub-rule (3) of Rule 96ZO as ultra vires the rule making power of the Central Government under Section 37 of the Central Excise Act, 1944. Para 1 of the appeal memorandum reads as under: 1. The appellant by way of this Appeal challenges the Sub-rule (3) of Rule 96ZO framed under Section 37 of the Central Excise Act, 1944 as being ultra vires the rule making power of the Central Government under Section 37 of the said Act of 1944 on the ground that it runs contrary to and is framed in violation of mandatory provisions and the scheme reflected in Section 3-A of the Central Excise Act, 1944 and further challenges Order-in-Original No. 10/Commr Ahmd-II/98 dated 1.5.1998 issued on 4.5.1998 passed by Commissioner of Central Excise, Ahmedabad II and two Showcause Notices as being illegal, without jurisdiction, without authority of law and passed contrary to the provisions of statutory provisions and ignoring the relevant considerations and taking irrelevant considerations into considerations on the followeing set of facts, on the grounds and praying the relief prayed for hereinafter.

4. As against the aforesaid contentions on behalf of the appellants, learned SDR has pointed out that the legal validity of Compounded Levy Scheme remains upheld by the Apex Court - Venus Castings Pvt. Ltd. including Rule 96ZO(3). According to the learned SDR in view of the Hon'ble Supreme Court's decision, the present challenge have no merit. He has also pointed out that Rule on the subject takes into account only machinery of production and not ancillary item like DG set.

5. We have perused the records and have considered the submissions made by both side. We find merit in the submissions made by the learned SDR and accept them. The appeals fail and are dismissed.

(The operative part of the order already pronounced in Court on 29.10.2003).

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Gujarat Electromelt Ltd. vs Cce Same Subject Excise Same Judge K Usha, N T C.N.B.