2007 (4) TMI 561 - AT - Central Excise

Summary

Issues involved: Determination of Annual Capacity of Production (ACP) for non-alloy steel ingots u/s Rule 3(3) of the Induction Furnace Annual Capacity Determination Rules, 1997, violation of natural justice u/s Section 3A(i) of the Central Excise Act.

The judgment by the Appellate Tribunal CESTAT, CHENNAI pertained to the determination of the Annual Capacity of Production (ACP) for non-alloy steel ingots by the Commissioner of Central Excise. The appellants, engaged in manufacturing, contested the ACP set at 25,600 MTs based on two furnaces, despite one furnace being non-operational during the period. They argued that their repeated requests for ACP determination based on one furnace were ignored, and they were not granted a fair hearing as required by Section 3A(i) of the Central Excise Act. The appellants had already discharged the admitted duty liability of Rs. 15,46,666. Subsequently, the Commissioner revised the ACP to 12,800 MTs considering only one furnace after a letter dated 16-6-98.

The Tribunal acknowledged the appellants' grievances, emphasizing that the determination of ACP was a quasi-judicial function necessitating a reasonable opportunity for the party to be heard. The Commissioner's communication of the ACP did not indicate any such opportunity was provided to the appellants. Consequently, the Tribunal set aside the challenged ACP determination and directed the Commissioner to reassess the ACP for the appellants for the relevant period after affording them a fair hearing. The appeal was allowed by way of remand, ensuring procedural fairness in the determination process.

*(Dictated and pronounced in open Court)*