2004 (5) TMI 407 - AT - Central Excise

Summary

Issues:
Challenge to the order fixing Annual Capacity of Production based on revised 'i' factor declared by the Commissioner.

Analysis:
The appeal challenged the Commissioner's order adjusting the Annual Capacity of Production for Re-Rolling Steel Mills due to an increase in the 'i' factor from 0.59 to 0.627 based on a report by the National Institute of Secondary Steel Technology (NISST). The appellants contended that the inspection by NISST on 16-11-99 should only apply prospectively, as no misdeclaration was found. They argued that without prior intimation for a joint inspection, the revised 'i' factor should not be enforced. The appellant's representative cited various Tribunal decisions supporting their position.

The Revenue, represented by the SDR, justified the duty liability adjustment under Rule 96ZP(3) of the Central Excise Rules, 1944, and Notification No. 32/97-C.E. (N.T.). The 'i' factor revision was made by the Commissioner using the powers granted under the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997. The Revenue argued that the inspection was conducted with due process, including independent witnesses and a Panchnama. The appellants did not contest the inspection findings but claimed the variation was due to wear and tear, which the Commissioner rejected. The Revenue asserted that the Commissioner correctly finalized the capacity based on unchanged parameters.

In their assessment, the Tribunal acknowledged the appellant's objection to the retrospective application of the revised 'i' factor but noted that no challenge was made to the accuracy of the 'i' factor itself. The Tribunal distinguished previous cases where the 'd' factor was disputed, emphasizing that the 'i' factor determination was not contested in the present matter. The Tribunal highlighted that the 'i' factor remains constant unless relevant systems are altered, which the appellants did not claim. As the appellants did not object during or after the inspection, the Tribunal upheld the Commissioner's decision to finalize the capacity based on the 'i' factor determined by NISST. Consequently, the appeal was dismissed for lack of merit.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT, Bangalore, provides a comprehensive overview of the issues raised, arguments presented by both parties, and the Tribunal's reasoning leading to the dismissal of the appeal challenging the adjustment of Annual Capacity of Production based on the revised 'i' factor determined by the Commissioner.