In a recent development, a longstanding matter from the year 2013 regarding the abatement of duty under the compounded levy scheme for cold rolling iron and steel machines has reached a decision.
The issue at hand involved the appellants’ claim for the abatement of duty under Notification No. 17/2007-CE, dated 01.03.2007. The appellants argued that certain machines were not in operation and remained idle or dismantled in their factory for a specific period. However, the department has denied the abatement of duty as claimed by the appellant. The Commissioner (Appeals) has confirmed the duty without abatement and has supported the department’s stand that the Central Excise duty has been correctly demanded on the cold rolling machines.
It has been brought to the attention of the Tribunal that the matter has already been addressed in the case of SS Strips Pvt. Limited vs. CCE, Ahmedabad-II. The Division Bench of CESTAT Ahmedabad, in their order No. A/11629-11630/2018 dated 01.08.2018, has provided a relevant interpretation of the matter. According to the ruling, Notification No. 17/07 offers concessional rates of duty based on certain conditions. The notification clearly stated that the assessee has the option to pay the excise duty on the cold rolling machines “installed” for cold rolling. The crucial aspects to consider are the terms “option” and “installed” in this context. The scheme does not provide any exemption if the assessee chooses to close or not operate some machines. It specifically prescribes that the duty should be paid based on the number of machines “installed” in the factory. Furthermore, the notification exempts the assessee from Rule 8 of the Central Excise Rules, 2002.
Based on the above interpretation, it is evident that the appellants have consciously chosen a scheme that does not allow any concession for machines installed in the factory but not in use. The notification and scheme do not provide any procedure for non-use of the installed machines.
Considering the aforementioned factors and the decision of the Division Bench of CESTAT Ahmedabad, the Tribunal has decided to dismiss the appeals made by the appellants.
Case title: Sagar Rolling Mills Pvt Limited v/s Commissioner of Central Excise & ST, Ahmedabad
Citation: EXCISE Appeal No. 13189 of 2013-SM
