2005 (5) TMI 603 - AT - Central Excise

Summary

Issues:
1. Determination of Annual Capacity of Production (ACP) under Compounded Levy Scheme.
2. Challenge to Commissioner's decision on ACP and duty liability.
3. Additional ground raised in appeal regarding legality of proceedings.
4. Rejection of claim for re-determination of ACP based on actual production.
5. Examination of relevant evidence and materials in determining ACP.
6. Decision on appeal and remand order directing fresh adjudication by Commissioner.

Analysis:
1. The case involved the appellants engaged in manufacturing MS ingots under the Compounded Levy Scheme. The Commissioner initially determined their Annual Capacity of Production (ACP) at 3.5 MTS, which was later challenged. The Tribunal directed a fresh determination of ACP, leading to a revised ACP of 11,200 MTS and a demand for differential duty and penalty.

2. In the appeal, a new ground was sought to be incorporated challenging the legality of proceedings post the remand order. The appellants argued that certain rules had been omitted without saving clauses, rendering subsequent proceedings invalid. However, the Tribunal held that the appellants were estopped from raising this plea at a later stage as they had benefited from the remand order.

3. On the merits of the case, the appellants claimed re-determination of ACP based on actual production, which was rejected by the Commissioner. The appellants provided evidence, including certificates from Chartered Engineers and electricity consumption records, to support their claim. They argued that the Commissioner's decision was erroneous and beyond the scope of the show-cause notice.

4. The Tribunal examined the evidence presented, including reports from independent Chartered Engineers and relevant records. It noted that the Commissioner had primarily relied on one certificate regarding power capacity, overlooking other materials such as electricity board records and production registers. Citing precedents, the Tribunal emphasized the relevance of power factor in determining ACP for manufacturers of MS ingots.

5. Ultimately, the Tribunal set aside the impugned order and allowed the appeal by remanding the case to the Commissioner for a fresh adjudication. The Commissioner was directed to consider all evidentiary materials, allow the appellants to produce additional evidence, and provide a reasonable opportunity for a hearing.

6. The appeal was allowed by way of remand, emphasizing the need for a comprehensive re-examination of the ACP determination based on actual production capacity and relevant evidentiary materials.