1984 (4) TMI 285 - AT - Central Excise

Summary

Issues:
1. Differential duty calculation for different periods.
2. Interpretation of installed capacity for exemption under Notification No. 128/77.
3. Validity of second opinion from DGTD on installed capacity.
4. Calculation method for determining installed capacity.
5. Benefit of doubt to be given to the assessee in interpreting fiscal statutes.

Analysis:

Issue 1:
The appeals involved differential duty calculations for different periods based on the alleged actual installed capacity of the paper mill. The Appellants contested these calculations, leading to a series of show cause notices and appeals.

Issue 2:
The central issue revolved around the interpretation of the term "installed capacity" for availing exemption under Notification No. 128/77. The Appellants argued that the capacity recognized by the Government through the industrial license should be considered, which was confirmed to be 5000 M.T. per annum.

Issue 3:
A key contention was the validity of the second opinion from DGTD on the installed capacity, which contradicted the earlier certificate. The Appellants challenged the basis of this second opinion, highlighting the lack of inspection and technical support.

Issue 4:
The calculation method for determining installed capacity was extensively debated. The Appellants argued that the working capacity should not be equated with the installed capacity, emphasizing factors like raw materials, climate, and technical specifications of the machinery.

Issue 5:
The principle of giving the benefit of the doubt to the assessee in interpreting fiscal statutes was crucial. The Appellate Tribunal emphasized that in case of doubt, the interpretation favoring the assessee should be adopted. The technical expert's opinion and the correspondence with DGTD supported the Appellants' claim of the installed capacity being 5000 M.T.

In conclusion, the Tribunal allowed the appeals, rejecting the theoretical calculations by the Department and emphasizing the importance of authentic records and technical expertise in determining installed capacity. The judgment underscored the need to interpret fiscal statutes in favor of the assessee in case of doubt, highlighting the significance of industrial licenses and technical specifications in assessing installed capacity for duty calculations.