2003 (9) TMI 689 - AT - Central Excise

Summary

Issues:
1. Declaration of 'd' factor for determining the annual capacity of a re-rolling mill.
2. Discrepancy between the declared 'd' factor and the 'd' factor mentioned in the sale deed.
3. Allegation of suppression of actual 'd' factor leading to lower annual capacity determination.
4. Commissioner's decision based on the sale deed description of the mill.

Analysis:
The case involved a re-rolling mill that made a declaration regarding the 'd' factor under the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997. The appellant declared a 'd' factor of 245 mm, which was verified by Central Excise Officers, leading to an annual capacity determination of 6250.327 MT, and duty payment from September 1997 to March 2000.

Subsequently, Central Excise authorities objected to the discrepancy between the 'd' factor declared by the appellant and the 'd' factor mentioned in the sale deed as 260 mm. A show-cause notice alleged suppression of the actual 'd' factor, proposing an increase in annual capacity to 6542.75 MT, a demand of Rs. 2,26,641/-, and penalty imposition. The Commissioner adjudicated the notice.

During the proceedings, the appellant clarified that the 'd' factor in the sale deed was an approximate size based on the rolls used, not the correct 'd' factor. However, the Commissioner relied solely on the sale deed description, rejecting the appellant's explanation.

The Tribunal analyzed Rule 3 of the Determination Rules, emphasizing the requirement for verification of declared parameters by Central Excise Officers before determining annual capacity. The 'd' factor, reflecting the nominal centre distance of pinions, was subject to adjustment based on actual verification, not the sale deed specification. As the actual verification confirmed the declared 'd' factor, the Tribunal deemed the demand based on the sale deed specification unsustainable, setting aside the order and allowing the appeal with consequential relief to the appellants. The stay petition was also disposed of accordingly.