2012 (5) TMI 751 - HC - Central Excise

Summary

Issues Involved:
1. Powers of the Commissioner of Central Excise to determine the capacity of production.
2. Determination of annual capacity of production without comparing with other furnaces.
3. Error of law by the Appellate Tribunal in methodology applied for determination.
4. Error of fact and law in considering actual lining and patching and dummy coils.

Summary:

Issue 1: Powers of the Commissioner of Central Excise to determine the capacity of production.
The appellants contended that they had provided documents showing the production capacity of their furnace was reduced to 3 M.T., and the Commissioner had no authority to determine otherwise. The court held that Rule 3(1) of the Induction Furnace Annual Capacity Determination Rules, 1997, requires an authenticated copy of the manufacturer's invoice or trader's invoice who supplied or installed the furnace. Since the document provided by the appellants was not from the manufacturer or installer, sub-rule (1) did not apply. Thus, the Commissioner correctly determined the capacity under sub-rule (2).

Issue 2: Determination of annual capacity of production without comparing with other furnaces.
The court noted that sub-rule (2) of Rule 3 applies in the absence of an authenticated invoice, allowing the Commissioner to determine capacity based on comparable furnaces or other relevant materials. The Commissioner's determination was found to be in accordance with this rule.

Issue 3: Error of law by the Appellate Tribunal in methodology applied for determination.
The appellants argued that the Tribunal erred in law by not considering their specific argument regarding the methodology used by the Commissioner. The court found no merit in this argument, noting that the Tribunal had previously remanded the matter for a hearing, and the Commissioner had followed due process.

Issue 4: Error of fact and law in considering actual lining and patching and dummy coils.
The appellants claimed that the Commissioner erred by not considering actual lining and patching and by considering dummy coils. The court found no merit in this argument, as the Commissioner's determination was based on verified dimensions and a formula developed with technical expertise.

Conclusion:
The court dismissed the appeal, affirming that the Commissioner's determination of the annual capacity of production was correct and in accordance with the applicable rules. The questions raised were either answered or treated as not pressed, and there was no merit found in the appeal.