2007 (6) TMI 335 - AT - Central Excise

Production capacity based duty - Annual capacity of production - Strictures against Commissioner

Summary

Issues:
1. Failure to obtain prior permission for changing the diameter of the rolling mill.
2. Commissioner's silence and lack of response to the appellant's request.
3. Tribunal's intervention in the interest of justice.

Analysis:

Issue 1: Failure to obtain prior permission for changing the diameter of the rolling mill
The appellants initially declared the diameter of the rolling mill as 170 mm, but upon verification, it was found to be 165 mm. Seeking to reduce the diameter further to 158 mm for less duty-liability, the appellants requested permission from the Commissioner. Despite repeated reminders and no response from the Commissioner, the demand against them was confirmed based on the higher diameter. The lower Appellate Authority upheld the demand due to the absence of approval from the Commissioner. The appellant relied on a Tribunal decision allowing relief in a similar case.

Issue 2: Commissioner's silence and lack of response to the appellant's request
The Tribunal noted the Commissioner's silence and failure to respond in a timely manner to the appellant's application, as required by law and the Citizens' Charter. The Tribunal deemed this a case where intervention was necessary in the interest of justice. Therefore, the Tribunal set aside the impugned orders and directed the jurisdictional Commissioner to consider the appellant's request ex post facto. If there is no evidence to suggest that the change was not made as claimed by the appellants, the Commissioner was instructed to allow the change after providing a hearing opportunity to the appellants.

Issue 3: Tribunal's intervention in the interest of justice
After hearing both sides and reviewing the case records, the Tribunal found the Commissioner's silence unjustifiable and intervened to ensure a fair outcome. The Tribunal's decision to step in and direct the Commissioner to consider the appellant's request ex post facto was based on the principles of justice and fairness. By allowing the appeal with the specified direction, the Tribunal aimed to rectify the lack of response from the Commissioner and provide the appellants with a fair opportunity to address the duty demand issue.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, Kolkata, and the rationale behind their decision to intervene and provide directions for resolving the dispute in a just and lawful manner.