PAYMENT OF DUTY ON NEW COLD ROLLING MACHINES FOR PATTA-PATTI MANUFACTURERS

PAYMENT OF DUTY ON NEW COLD ROLLING MACHINES FOR PATTA-PATTI MANUFACTURERS

The manufacturers of stainless steel patta-patti are covered under special procedure contained in Rule 96 ZA to Rule 96 ZGG of Central Excise Rules. They are currently paying duty at the rate of Rs. 15000/- per cold rolling machine per month. This article ponders over the payment of duty on new machine installed in the factory premises of such manufacture.

As per provisions of Rule 96ZC(3),any manufacturer has to intimate as well as obtain permission before making any change in number of machines installed in the factory premises. The duty is payable as per provisions of Rule 96ZC(2) which is only charging provisions. This Rule reads as follows: -

“The sum payable as under sub-rule (1) shall be calculated by application of such rate to the maximum number of cold rolling machines installed by or on behalf of such manufacturer in one or more premises at any time during three calendar months immediately preceding the calendar month in which the application under Rule 96 ZC is made.”

Also, the manufacturer has to deposit duty and apply to Central Excise Department for the permission for clearance of patta-patti from his factory for ensuing month as per provisions of Rule 96 ZC (1) ibid. The Rule is enumerated below: -

“Such manufacturer shall, at any time during the calendar month immediately preceding any month of part thereof, as the case may be, in respect of which he has been permitted to avail himself of the provisions of this section, make an application to the proper officer in the proper Form for leave to remove [stainless steel/pattas, or aluminium circles] from his premises during he ensuing month, declaring therein the maximum number of cold rolling machines installed by him or on his behalf, in one or more premises at any time during three calendar months immediately preceding the calendar month in which application is made.

Now, we look at a practical example. Suppose, a manufacturer is operating with two machines seeks permission from the department in the month of July- 2000 for starting third new machine from August-2000 as per provisions of Rule 96 ZC (3). He will file application AR-8AA (prescribed under Rule 96 ZC (1)) with the department at the end of calendar month of July-2000 along with calculation of number of machines. The three proceeding months immediately preceding the calendar month of July-2000 will be June-2000, May-2000 and April-2000. The maximum number of machines will be two only. As such, he has to pay duty for two machines only.

Similarly, during the next month he will deposit duty for September-2000 at the end of August-2000. The immediate preceding three calendar months to said calendar month (August-2000) will be July-2000, June-2000 and May-2000. The maximum number of cold rolling machines in these months will be two only as the new machine gas started in August-2000.

Thereafter, he will deposit duty at the end of September-2000 for the month of October-2000. The three preceding calendar month will be August-2000, July-2000 and June-2000 and number of machines will be as under: -

Month	No. of Machines
August-2000	Three
July-2000	Two
June-2000	Two

So, he has to deposit the duty for three machines being the maximum number of machines. So, it is ample clear that he need not to pay duty for continuous two months even if the machine is started by him. In this case, the machine is started in August-2000 but he is paying duty for the month of October-2000.

Furthermore, the argument advanced that the existing set of Rules does not contain any provision for new machine is baseless because the calculation of maximum number of machine implies the change in number of machines. Otherwise, it does not have any meaning. So, the manufacturer need not to pay duty from the starting of machine itself. But the department has deployed its old weapon of seeking clarification from Board and asking the assessee to pay duty till the clarification is received. Let us wait for clarification and pray to God so that it might be received in years to come.

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PAYMENT OF DUTY ON NEW COLD ROLLING MACHINES FOR PATTA-PATTI MANUFACTURERS

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