2009 (1) TMI 861 - AT - Central Excise

Summary

Issues:
Interpretation of duty liability under Compounded Levy Scheme based on Annual Production Capacity (APC) - Exclusion of galleries from determining APC - Challenge to APC fixed by Commissioner - Applicability of judicial decisions on APC determination.

Analysis:
The case involved the appellants engaged in fabric processing, required to discharge duty liability based on the Annual Production Capacity (APC) under the Compounded Levy Scheme. The appellants excluded galleries from the APC calculation, relying on a Tribunal decision and a subsequent Supreme Court confirmation that galleries should not be considered part of chambers for APC determination.

The dispute arose as the demand was confirmed against the appellants for not challenging the APC fixed by the Commissioner, making them bound by it. The Tribunal referred to a Bombay High Court judgment in the case of M/s. Om Textiles P. Ltd., which held that even without challenging the APC, the benefit of the law declared by the Supreme Court should be extended. Following this precedent, the impugned order was set aside, and the matter was remanded to the Original Adjudicating Authority for a fresh decision in line with the Bombay High Court's decision.

In conclusion, the Tribunal emphasized the importance of applying judicial decisions on APC determination, even in cases where the APC fixed by the Commissioner is not challenged. The ruling highlighted the need to extend the benefit of legal precedents to ensure fair and consistent application of duty liability under the Compounded Levy Scheme.