2005 (3) TMI 626 - AT - Central Excise

Summary

Issues:
1. Challenge to the ACP determination by the Commissioner of Central Excise.
2. Challenge to the demand of duty based on the set-aside ACP order communicated by the Assistant Commissioner.
3. Penalty imposed by the Commissioner under Rule 173Q of the Central Excise Rules, 1944.

Analysis:

Issue 1: Challenge to the ACP determination by the Commissioner of Central Excise
In Appeal No. E/1172/2001, the appellants contested the ACP determination by the Commissioner, raising multiple grounds for challenge. They argued that the Commissioner erred in relying on the initial verification report by Prof. L. Vijayaraghavan certifying the furnace as 'Pusher Type' when a subsequent report classified it as 'Batch Type.' The appellants insisted on a fresh determination of ACP by the Commissioner after considering another expert's opinion if the second report was not accepted. Additionally, they highlighted the change in furnace parameters, emphasizing the need for its proper consideration in the ACP determination. The appellants referred to relevant case law to support their contentions.

Issue 2: Challenge to the demand of duty based on the set-aside ACP order
The demand of duty was based on an ACP order communicated by the Assistant Commissioner, which had been set aside by the Tribunal. The Commissioner's subsequent ACP determination under Rule 5 of the ACD Rules 1997 was challenged as the valid basis for the duty demand. The Tribunal found that the demand could not be sustained on the basis of the set-aside ACP order. Consequently, the Tribunal set aside the demand confirmed by the Commissioner for show-cause notices issued before the ACP determination by him.

Issue 3: Penalty imposed by the Commissioner
In Appeal No. E/296/2002, the challenge was against a penalty imposed by the Commissioner under Rule 173Q of the Central Excise Rules, 1944. The penalty was equivalent to the duty amount on the appellants. The penalty issue was initially on hold pending a similar matter before the Madras High Court. Once the High Court resolved the issue, the Commissioner imposed the penalty. The Tribunal ruled in favor of the appellants on the penalty challenge as the duty demand had been set aside, rendering the penalty imposition unjustified.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals by remanding the case to the Commissioner of Central Excise for a fresh determination of the ACP in accordance with the law and the Tribunal's directives.