2015 (10) TMI 2713 - AT - Central Excise

Valuation - annual capacity based production - pinion stand found was 195 mm. and not 157 mm. as declared earlier by the appellant - demand of differential duty - Held that - It is a fact that the change of parameter was noticed only on surprise check by the officers - It is also a fact that the appellants had declared gearbox of 195 mm. in their earlier declaration on 26.08.97. When the Annual Capacity was fixed by the Commissioner based on the declarations made by the appellant it is not open to the appellant to change some of the parameters without intimation and later on to claim that it is only a temporary change. Since there is no evidence of the exact date of the change in the parameter submitted by appellant we are in agreement that the capacity of production as fixed by the Commissioner based on 195mm. is sustainable. Appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against the original order passed by the Commissioner of Central Excise, Ludhiana demanding differential duty for a specific period.
- Discrepancy in the declared production capacity of the appellant.
- Appellant's argument regarding the temporary change in production parameters.
- Commissioner's decision based on the declared parameters for fixing annual production capacity.
- Appellant's failure to inform the department about the change in production parameters.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi pertains to a case where the appellants, engaged in manufacturing Hot Rolled Non-alloy Steel products, were demanded a differential duty for a period due to discrepancies in their declared production capacity. The Commissioner had fixed the Annual Capacity Production based on the appellant's declaration and subsequent verification. The appellant argued that a temporary change in production parameters was made due to a defect, but the department contended that the change was a violation. The Tribunal noted that during a surprise check, the production parameters were found different from the declaration. The appellant failed to provide substantial evidence supporting the temporary nature of the change. The Tribunal emphasized that the appellant's earlier declaration included the higher parameter, indicating prior possession. As the appellant did not notify the department about the change, the Tribunal upheld the Commissioner's decision to fix the production capacity based on the higher parameter, dismissing the appeal.

In this case, the main issue revolved around the discrepancy in the declared production capacity of the appellant and the subsequent demand for differential duty. The appellant's argument of a temporary change due to a defect was refuted by the department, leading to the Tribunal's decision based on the lack of evidence supporting the temporary nature of the change. The Tribunal highlighted the importance of notifying authorities about any changes in production parameters to avoid such disputes, ultimately upholding the Commissioner's decision and dismissing the appeal.

The Tribunal's analysis focused on the failure of the appellant to inform the department about the change in production parameters, leading to the conclusion that the production capacity fixed by the Commissioner based on the higher parameter was valid. The lack of documentary evidence supporting the temporary nature of the change worked against the appellant's case. The Tribunal emphasized the significance of accurate declarations and timely communication with the authorities to prevent disputes regarding duty payments. Consequently, the appeal was dismissed, affirming the Commissioner's decision regarding the fixed production capacity and the demand for differential duty.