2005 (11) TMI 391 - AT - Central Excise

Issues:
1. Redetermination of annual capacity of production by the Commissioner of Central Excise.
2. Interpretation of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997.
3. Provision for redetermination under the Rules.

Issue 1: Redetermination of annual capacity of production
The Commissioner of Central Excise, Goa, redetermined the annual capacity of production of the appellant re-rolling mill at 14166.505 MT for the year 1999-2000. The appellants contested this redetermination, arguing that there was no provision for redetermination under the Rules. The appellant mill had been provisionally determined at 12170.0124 MT and finally determined at 12168.80 MT in previous orders. The department sought redetermination as the actual production exceeded the initially determined capacity. However, the Tribunal found that there was no provision for redetermination in the Rules. The Tribunal concluded that the Rules did not provide for redetermination and set aside the impugned order, allowing the appeal.

Issue 2: Interpretation of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997
The Tribunal analyzed the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 to determine whether redetermination was permissible under the provisions. Rule 5 was cited by the department to support the contention that redetermination was allowed. However, upon careful examination, the Tribunal noted that Rule 5 stated the annual capacity determined shall be deemed equal to the actual production of the mill in the previous financial year but did not explicitly provide for redetermination. The Tribunal agreed with the appellant's submission that there was no provision for redetermination under the Rules. This interpretation led to the setting aside of the redetermination order by the Commissioner.

Issue 3: Provision for redetermination under the Rules
The central issue revolved around whether the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 contained a provision for redetermination of annual production capacity. The Tribunal, after a thorough review of the Rules, concurred with the appellant's argument that there was no specific provision allowing for redetermination. The absence of a clear provision for redetermination led the Tribunal to conclude that the impugned order of redetermination by the Commissioner was not in accordance with the Rules. Consequently, the Tribunal set aside the redetermination order and allowed the appeal based on the lack of provision for redetermination under the Rules.

This detailed analysis of the judgment highlights the key issues of redetermination of annual production capacity, interpretation of the relevant rules, and the absence of a provision for redetermination under the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997.

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