2003 (9) TMI 686 - AT - Central Excise

Summary

Issues: Determination of Annual Capacity of Production (ACP) under Section 3A of the Act, read with Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998.

Analysis:
1. The case involved M/s. Gopi Krishna Processors Pvt. Ltd. having two units engaged in fabric manufacturing and processing, with hot air stenter machines and a float drying machine.
2. The main issue was the determination of the Annual Capacity of Production (ACP) of the appellants under Section 3A of the Act and the Stenter Rules.
3. The ACP of the appellants was fixed by the jurisdictional Commissioner of Central Excise based on the notifications issued under Section 3A.
4. The appellants provided details of the hot air stenter installed in their factory as required by Notification No. 42/98-C.E. (N.T.), including the number of chambers, fabric details, and quantities cleared.
5. During a visit by departmental officers, it was observed that the stenter had slits with rollers enabling fabric movement below the stenter chain, leading to the assumption of a "float drying machine" and a capacity enhancement requirement.
6. The appellants argued that the fabric movement below the stenter chain did not involve heat setting or drying, and the arrangement did not constitute a float dryer as assumed by the department.
7. After hearing both sides, the Tribunal considered the appellants' submissions and a previous judgment in a similar case, where it was held that fabric movement below the stenter chain did not amount to a float dryer attachment.
8. Referring to the previous judgment, the Tribunal set aside the impugned orders contrary to its findings, allowing the appeals and granting the appellants consequential reliefs.

This detailed analysis covers the issues involved in the judgment, focusing on the determination of Annual Capacity of Production and the interpretation of the float drying machine concept in relation to the hot air stenter setup.