M/S HANS STEEL ROLLING MILL.versusCOMMNR. OF CENTRAL EXCISE, CHANDIGARH

                                     r
                   [2011] 3 S.C.R. 841


            M/S HANS STEEL ROLLING MILL.                       A
                             v.
    COMMNR. OF CENTRAL EXCISE, CHANDIGARH
          (Civil Appeal No. 2715 of 2003)
                     MARCH 10, 2011
                                                               B
          [DR. MUKUNDAKAM SHARMA AND
                 ANIL R. DAVE, JJ.]

   HOT RE-ROLLING STEEL MILLS ANNUAL CAPACITY
DETERMINATION RULES, 1997:                                     c
     Rule 96ZP read with s. 3A of Central Excise Act-
Compound Levy Scheme-Applicability of s.11-A -Held:
Compound levy scheme for collection of duty based on
annual capacity production uls 3 and Capacity Determination    0
Rules is a separate scheme from the normal scheme for
collection of central excise duty -It is a comprehensive
scheme in itself and general provisions in the Act and Rules
are excluded - The time limit prescribed for one scheme
would be completely unwarranted for another scheme and the     E
time limit prescribed uls 11A of the Act is no exception.

     The appellants were engaged in the manufacture of
iron and steel products falling under Chapters 72 and 73
of the Central Excise Tariff Act, 1985. During the period
ranging from 1.9.1997 to 31.3.2000, the goods                  F
manufactured by the appellants 1997 to 31.3.2000, the
goods manufactured by the appellants were chargeable
to Central Excise Duty in terms of s. 3A of the Act, and
the payment of duty was to be under Rule 96ZP of the
Central Excise Rules, 1944. The Hot-Re-rolling Steel Mills     G
Annual Capacity Determination Rules, 1997 were
introduced by notification no. 32/97-CE (NT) dated
01.08.1997, wherein the manner and procedure for
determination of annual capacity of rolling mill was
                            841                                H
    842      SUPREME COURT REPORTS            [2011) 3 S.C.R.

A provided. The Commissioner of Central Excise
  determined the Annual Capacity to be 3355 MT. A show
  cause notice was issued to the appellants on 3.11.1998,
  contending that the demand of the duty has to be based
  on the capacity determination of 3355MT, for which the
B recovery of duty u/s. 11A of the Act amounting to Rs
  2,19,750.00 was to be made. Subsequently, the appellants
  changed the parameters of their re-rolling mill and
  applied for the re-determination of the annual capacity for
  fresh declaration in terms of Capacity Determination
c Rules. On 31.5.1999, the Commissioner passed an order
  stating the Capacity Determination Rules as 1890MT. The
  appellants filed an appeal before the Tribunal. The larger
  Bench of the Tribunal, held that in case of the
  manufacturer operating under Compound Levy Scheme
  in terms of s. 3A of the Act, and Rule 96ZP of the Central
0
  Excise Rules, recovery mechanism provided in terms of
  s. 11 A of the Act was not to be followed and hence the
  matter was to be remanded back to the Commissioner for
  re-determination. In the instant appeal filed by the
  assessee, the question for consideration before the
E Court was whether the provisions of time limit contained
  in Section 11A of the Central Excise Act, 1944 would be
  applicable to the recovery of amounts due under the
  compound levy scheme for Hot-Re-rolling mills, under the
  Annual Capacity determination Rules 1997.
F
          Dismissing the appeal, the Court
      HELD : 1.1. It is clearly established that the
  appellants are availing the facilities under the Compound
G Levy Scheme, which they themselves, opted for and filed
  declarations furnishing details about annual capacity of
  production and duty payable on such capacity of
  production. It has to be taken into consideration that the
  compounded levy scheme for collection of duty based
  on annual capacity of production u/s. 3 of the Act and Hot
H
HANS STEEL ROLLING MILL v. COMMNR. OF CENTRAL 843
                   EXCISE
Re-rolling Steel Mills Annual Capacity Determination A
Rules, 1997 is a separate scheme from the normal
scheme for collection of central excise duty on goods
manufactured in the country. Under the same, Rule 96P
of the Rules stipulate the method of pay~ent and Rule
96P .contains detailed provision regard,ng time and B
manner of payment and it also contain~ provisions
relating to payment of interest and penalty in event of
delay in payment or non-payment of dues. Thus, this is
a comprehensive scheme in itself and general provisions
in the Act and Rules are excluded. [Para 12] [847-C-E]  c
     Commissioner of C. EX & Customs v. Venus Castings
(P) Ltd 2000 (117) ELT 273 (SC); Union of India v. Supreme
Steels and General Mills 2001 (133) ELT 513 {SC) and
Collector of Central Excise, Jaipur V. Raghuvar (India) Ltd
2000 (118) ELT 311 (SC) -relied on                             D
       1.2. The Tribunal has rightly held that the importing
  of elements of one scheme of tax administration to a
. different scheme of tax administration would be wholly
' inappropriate as it would disturb the smooth functioning     E
  of that unique scheme. The time limit prescribed for one
  scheme could be completely unwarranted for another
  scheme and time limit prescribed u/s. 11A of the Act is
  no exception. [Para 15] [84.8-C-D]
                     Case Law Reference:                       F

     2000 (117) ELT 273 (SC)     relied on        para 13
     2001 (133) ELT 513 (SC)     relied on        para 13
     2000 (118) ELT 311 (SC)     relied on        para 14      G
    CIVIL APPELLATE JURISDICTION : Civil Appeal No. ·
2715 of 2003 ect.
     From the Judgment & Order .datedI 8.4.2002
                                              .
                                                of the
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    844      SUPREME COURT REPORTS                 [2011) 3 S.C.R.


A   Customs, Excise and Gold (Control) Appellate Tribunal, New
    Delhi in Appeal No. E/765/01-NB (DB).

                                WITH

    C.A. No. 2717 & 3988 of 2003.
B
        Balbir Singh, Rajesh Kumar, Sangeeta Chaudhary,
    Rupender Sinhmar, Deepak, Abhishek Singh Baghel, V.
    Shekhra S., H.R. Rao, Arijit Prasad, Jatin Rajput, B.V. Balaram
    Das, B. Krishna Prasad for the appearing parties.
c         The Judgment of the Court was delivered by

       DR. MUKUNDAKAM SHARMA, J. 1. The issue that falls
  for consideration in these appeals is, as to whether the
  provisions of time limit that are contained in Section 11 A of the
D Central Excise Act, 1944 (in short 'the Act') are applicable to
  the recovery of amounts due under the compound levy scheme
  for Hot-Re-rolling mills, under the Annual Capacity determination
  Rules 1997 because otherwise, it is a separate scheme for the
  collection of Central Excise Duty for the goods manufactured
E in the country.

          2. In order to record a definite finding on the aforesaid
    issue it would be necessary to set out certain facts leading to
    filing of the present appeals.

F      3. The appellants are engaged in the manufacture of iron
  and steel products falling under Chapter 72 and 73 of the
  Central Excise Tariff Act, 1985. During the period ranging from
  01.09.1997 to 31.3.2000, the goods manufactured by the
  appellants were chargeable to Central Excise Duty in terms of
G Section 3A of the Act. As per the Act, the duty was suppose to
  be paid on the annual production capacity of the plant,
  irrespective of the actual production. Under the scheme of
  Section 3A, the payment of duty to be under Rule 96ZP of the
  Central Excise Rules. The Hot-Re-rolling Steel Mills Annual
H
HANS STEEL ROLLING MILL v. COMMNR. OF CENTRAL 845
      EXCISE [DR. MUKUNDAKAM SHARMA, J.]

Capacity Determination Rules, 1997 were introduced by                A
notification no. 32/97-CE (NT) dated 01.08.1997, wherein the
manner and procedure for determination of annual capacity of
rolling mill was provided. On 27.04.1998, the Commissioner of
Cent,ral Excise determined the Annual Capacity to be 3355 MT.
                                                                     B
    4. Being aggrieved by the determination made, the
appellants filed an appeal before the Customs, Excise & ~old
(Control) Appellate Tribunal, (in short 'the Tribunal') New Delhi,
whereby and whereunder the Tribunal remanded the matter
back to the Commissioner for the re-determination of the value.
                                                                     c
    5. A show cause notice was issued to the appellants on
03.11.1998, contending that the demand of the duty has to be
based on the capacity determination of 3355MT, for which the
recovery of duty under Section 11A of the Act amounting to Rs ·
2,19,750.00 was to be made.                                     D

      6. On 11.12.1998, the appellants changed the parameters
of their re-rolling mill and applied for the re-determination of the _
annual capacity for fresh declaration in terms of Capacity
Determination Rules. On 31.05.1999, the Commissioner E
passed an qrder based on Rule 5 of the Capacity
Determination Rules stating the capacity as 1890MT. During
the pendency of the final re-determination, the Central Excise
Department issued a demand notice under Section 11 of the
Act, for recovery of duty. Aggrieved by the same, the appellants
filed a writ petition before the Punjab and Haryana High Court, F
whereby and whereunder the High Court set aside the demand
notice and directed the revenue to re-determine the annual
capacity.

     7. On 04.01.2001, the Commissioner of Central Eicise re-        G
adjudicated the matter and determined the annual capacity of
the period 1.09.97to 31.3.2000 to be 1890MT. The appellant
filed an appeal before the Tribunal against the same. On
08.04.2002, the larger bench of the Tribunal, held that in case
of the manufacturer operating under Compound levy Scheme             H
    846     SUPREME COURT REPORTS                 [2011) 3 S.C.R.


A in terms of Section 3A of the Act, and Rule 96ZP of the Central
  Excise Rules, recovery mechanism provided in terms of
  Section 11 A of the Act is not to be followed and hence the
  matter was to be remanded back to the Commissioner for re-
  determination.
B
       8. Still aggrieved the appellants filed the present appeals
  on which we heard the learned counsel appearing for the
  parties, who.have taken us through various orders passed by
  the different authorities and also through other connected
  records. Having considered the same, we proceed to dispose
C of the present appeal by recording our reasons for our
  conclusion.

       9. It was submitted by the counsel appearing for the
  appellants that the provisions of Section-11A of the Act are
D mandatory for recovery of any duty short levied and short paid.
  The learned counsel for the petitioner further contended that the ·
  Section 11A of the Act stipulates the procedure to be followc,'
  invariably and without exception for recovery of any duty which
  has not been levied or not paid or short paid or erroneously
E refunded. The counsel referred to sub Section (2) of Section
  11A of the Act which stipulated that the determination of amount
  of dutY. short levied etc, from a person is to be made after-
  considering his representation in the matter. In this case since
  the recovery proceedings have been initiated under Section 11
F of the Act, the procedural requirements for issuing notice,
  determining the amount etc, have not been satisfied at all. The
  counsel further submitted that there is no exception in the
  Central Excise Act or Rules regarding the procedure of
  recovery.

G        10. The aforesaid submissions of the counsel appearing
    for the appellants were however refuted by the counsel
    appearing for the respondent. The learned counsel for the
    respondent has pointed out that under the Compound Levy
    Sch1~me, the appellants opted for the payment of duty at
H
 HANS STEEL ROLLING MILL v. COMMNR. OF CENTRAL 847
       EXCISE [DR. MUKUNDAKAM SHARMA, J.]
                                                                  \
 compounded rates and filed declarations furnishing details      A
 about annual capacity of production and duty payable on such
 capacity of production. Once the commissioner approved such
 applications, payments are to be made in terms of Rule 96ZP
 of the Rules.           ·

     11. We have already set out the issue which falls for our   8
 consideration in these present appeals.

        12. On going through the records it is clearly established
  that the appellants are availing the facilities under the·
  Compound Levy Scheme, which they themselves, opted for and C
  filed declarations furnishing details about annual capacity of
  production and duty payable on such capacity of production. It
  has to be taken into consideration that the compounded levy
  scheme for collection of duty based on annual capacity of
  production under Section 3 of the Act and Hot Re-rolling Steel o
  Mills Annual Capacity Determination Rules, 1997 is a separate
  scheme from the normal scheme for collection of central excise
  duty on goods manufactured in the country. Under the same,
  Rule 96P of the Rules stipulate the method of payment and Rule
  96P contains detailed provision regarding time and manner of E
' payment and it also contains provisions relating to payment of
  interest and penalty in event of delay in payment or non-
  payment of dues. Thus, this is a comprehensive scheme in
  itself and general provisions in the Act and Rules are excluded.

      13. The judgments of this court in the cases of F
 Commissioner of C. EX & Customs v. Venus Castings (P)
 Ltd as reported in 2000 (117) ELT 273 (SC) and, Union of India
 v. Supreme Steels and General Mills as reported in 2001
 (133) ELT 513 (SC), has clearly laid down the principle that the,
 compound lev}t scheme is a separate scheme altogether and G
 an assessee opting for the scheme is bound by the terms of
 that particular scheme. It is settled matter now that Section 11A
 of the Act has no application for recovery under different
 schemes.            /
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     848     SUPREME COURT REPORTS                [2011) 3 S.C.R.- -

.A     14. In the case of Collector of Central Excise, Jaipur V.
  Raghuvar (India) Ltd as reported in 2000 (118) ELT 311 (SC),
  this court has categorically stated that Section 11A of the Act
  is not an omnibus provision which stipulates limitation for every
  kind of action to be taken under the Act or Rules. An example
B can be drawn with the Modvat Scheme, because even in that
  particular scheme, Section 11A of the Act had no application
  with regard to time limit in the administration of that scheme.

       15. We are in agreement with the finding and decision
  arrived at by the Tribunal that the importing of elements of one
C scheme of tax administration to a different scheme of tax
  administration would be wholly inappropriate as it would disturb
  the smooth functioning of that unique scheme. The time limit
  prescribed for one scheme could be completely unwarranted
  for another scheme and time limit prescribed under Section
D 11A of the Act is no exception.
         16. Accordingly, in view of the above, we find no merit in
     these appeals which are dismissed herewith but without costs.
     R.P.                                     Appeals dismissed.