2013 (2) TMI 541 - AT - Central Excise

Annual capacity of production - Whether length of the galleries are taken into consideration while fixing the annual capacity of the stenter - Assessee was engaged in processing of fabrics - Paying duty under - Hot Air Stenter Independent textile Processors Annual Capacity Determination Rules, 1998 - Annual capacity of the stenter - Revenue assessed the duty after taking into consideration the length of galleries Held that - Following the decision in case of S.P.B.L. LIMITED (2002 (9) TMI 113 - SUPREME COURT OF INDIA)that the length of galleries having no fan or radiator attached to it cannot be taken into consideration while determining the numbers of chambers. In favour of assessee

Summary

Issues:
- Challenge to impugned order by appellant
- Determination of annual capacity for duty assessment
- Applicability of legal precedent on length of galleries in determining capacity

Analysis:
1. Challenge to impugned order by appellant:
The appellant filed an appeal against the impugned order passed by the Commissioner (Appeals). The appellant, engaged in processing fabrics, paid duty under specific rules. The Revenue assessed duty considering the length of galleries, leading to a show cause notice for duty demand. The adjudicating authority dropped proceedings, but the Commissioner (Appeals) set aside this decision as the appellant had not challenged the order determining the unit's annual capacity. The issue of fixing annual capacity was deemed final without challenging the initial order.

2. Determination of annual capacity for duty assessment:
The appellant cited a Bombay High Court decision in a similar case, emphasizing that the length of galleries should not be considered in determining the stenter's annual capacity for duty assessment. Relying on this precedent, the Tribunal agreed with the appellant's contention that galleries' length should not impact annual capacity fixation. This interpretation influenced the Tribunal's decision to set aside the impugned order and allow the appeal.

3. Applicability of legal precedent on length of galleries in determining capacity:
The Tribunal, guided by the Bombay High Court decision, concluded that the length of galleries should not be factored into the annual capacity determination of the stenter. The Tribunal found merit in the appellant's argument based on the legal precedent, leading to the reversal of the impugned order and allowing the appeal. This application of legal precedent reinforced the Tribunal's decision in favor of the appellant, highlighting the significance of established legal principles in resolving similar issues.

In conclusion, the Tribunal's judgment favored the appellant's appeal by setting aside the impugned order, emphasizing the importance of challenging relevant orders and applying legal precedents to determine annual capacity for duty assessment accurately. The decision showcased the significance of legal principles and precedents in resolving disputes related to duty assessment and capacity determination in processing industries.