2001 (12) TMI 703 - AT - Central Excise

Summary

Issues:
1. Determination of annual capacity of induction furnace for central excise duty calculation.
2. Allegations of wilful suppression and mis-declaration of furnace capacity.
3. Legality of redetermination of annual capacity by the Commissioner.
4. Evidence supporting different claims regarding furnace capacity.
5. Applicability of statutory provisions in demanding differential duty.

Analysis:

Issue 1: Determination of Annual Capacity
The appellants manufactured non-alloy M.S. Ingots and Runner and Risers, and declared the capacity of their furnace as 2500 cc to 3000 cc. The Commissioner initially determined the annual capacity as 9600 M.Ts based on this declaration. However, discrepancies arose when documents indicated a higher capacity of 3390 kgs.

Issue 2: Allegations of Wilful Suppression
Allegations were made that the appellants, in collusion with a manufacturer, wilfully suppressed the actual capacity of the furnace to evade duty payment. Show cause notice was issued, calling for redetermination of the annual capacity and recovery of short-paid duty along with penalties.

Issue 3: Legality of Redetermination by Commissioner
The Commissioner redetermined the annual capacity at 10,848 MT and imposed penalties based on the allegations of mis-declaration and suppression. The appellants challenged the maintainability of this redetermination, citing previous court decisions. However, the Tribunal found the Commissioner's actions valid under Section 11A of the Central Excise Act.

Issue 4: Evidence Supporting Different Claims
Conflicting evidence was presented regarding the furnace capacity, with certificates from the manufacturer supporting the lower capacity, while statements and bills indicated a higher capacity. The Tribunal noted the lack of conclusive evidence to prove the certificates as fake and suggested consulting a technical authority for re-determination.

Issue 5: Applicability of Statutory Provisions
The Tribunal upheld the statutory provisions allowing for the demand of differential duty in cases of fraud or misstatement. The Commissioner's decision to redetermine the capacity based on new evidence was deemed within the scope of the law, rejecting the appellants' argument against the review of the initial order.

In conclusion, the Tribunal set aside the Commissioner's order and remanded the matter for re-determination of the furnace capacity by appointing a technical authority. The appellants were granted the opportunity for a fair hearing based on the expert's report before a final decision was made.