2008 (10) TMI 553 - AT - Central Excise

Summary

Issues involved: Appeal against demand of duty, applicability of Independent Processors definition, validity of Hot Air Stenter Independent Processors Annual Capacity Determination Rules, 1998, interpretation of legal precedents.

The appellants filed an appeal against the demand of duty, penalty, and interest. The issue revolved around whether the appellants were liable to pay duty under the Compounded Levy Scheme as per the definition of Independent processors. The Commissioner held that post a certain date, the appellants were not covered under this definition.

The learned Counsel raised objections both on preliminary grounds and on merit. The main contention was regarding the demand of duty based on the determination of annual capacity under the Hot Air Stenter Independent Processors Annual Capacity Determination Rules, 1998. Reference was made to a judgment by the Madras High Court which deemed these rules ultra vires of the Central Excise Act, 1944. The Tribunal also set aside an order following the decision of the Madras High Court.

The learned DR cited a Supreme Court decision where a similar issue was remanded back to the High Court for decision. It was highlighted that the appellant had not raised this issue before the lower authorities.

In a similar case, the Gujarat High Court dismissed an appeal without addressing the legal question, leading to a Supreme Court intervention. The Supreme Court emphasized the importance of the legal question involved and remanded the matter back for a decision. The Tribunal, respecting the decision of the Madras High Court, set aside the impugned order and allowed the appeal without delving into the case's merits.