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2015 (7) TMI 499 - AT - Central ExciseDetermination of the annual capacity of production of the appellant - determination of the annual capacity of production of Hot Rolling Mills on the basis of information to be furnished by the mill to the jurisdictional Central Excise officer. - Held that - Since Rule 5 had been introduced w.e.f. 1.9.1997 by notification no., 45/97-CE (NT) dated 30.08.1997, in our view this cannot be given retrospective effect when the notification itself makes it effective w.e.f. 1.9.1997. Therefore, in our view, Rule 5 would not be applicable to the cases where the declaration under Rule 3(1) declaring the parameters for determination of annual capacity of production had been made to the Commissioner during period prior to 1.9.1997. An assessee who had made this declaration during period prior to 1.9.1997 would be entitled for determination of his annual capacity of production on the basis of the Capacity determination Rules as the same existed during that period. Since there is no dispute that in the present case the declaration under Rule 3(1) had been made on 18.8.1997, Rule 5 would not be applicable and as such the Apex Court s Judgment also in the case of Doaba Steel Rolling Mills (2011 (7) TMI 10 - SUPREME COURT OF INDIA) would not be applicable. In view of this, the impugned order is not sustainable. The same is set aside. - Decided in favour of assessee.
Issues:
Interpretation of Rule 5 of the Capacity Determination Rules, 1997 and its applicability to the determination of annual capacity of production prior to its introduction. Detailed Analysis: The case involved a dispute regarding the determination of annual capacity of production of a rolling mill based on the Capacity Determination Rules, 1997. The rules prescribed a formula for determining annual capacity based on specific parameters declared by the mill to the Central Excise authorities. The introduction of Rule 5 through an amendment in 1997 raised questions about its retrospective application to cases where parameters were declared before its enactment. The appellant argued that Rule 5 should not apply to their case as they had declared the parameters before the introduction of the rule. They contended that the change in the nominal centre distance of the pinions in April 1997, before the rules came into effect, should not be subject to Rule 5. They relied on the absence of Rule 5 in the initial rules and the timing of their parameter declaration to support their position. On the other hand, the Department defended the application of Rule 5, emphasizing that the annual capacity determination was made effective from the date the rule was in operation. They cited a previous judgment by the Apex Court in a similar case to support their argument. Upon analysis, the Tribunal examined the timeline of events, including the issuance of notifications and the declaration of parameters by the appellant. They noted that Rule 5 was introduced through an amendment in 1997 and clarified its application to cases where parameters were changed after the initial declaration. The Tribunal distinguished the circumstances of the case from the precedent cited by the Department, highlighting the timing of parameter changes and the retrospective effect of Rule 5. Ultimately, the Tribunal ruled in favor of the appellant, concluding that Rule 5 should not be applied retroactively to cases where parameter declarations were made before its enactment. They emphasized that the appellant was entitled to have their annual capacity determined based on the rules existing at the time of their parameter declaration. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. In conclusion, the judgment delved into the interpretation and applicability of Rule 5 of the Capacity Determination Rules, 1997 in the context of determining the annual capacity of production for a rolling mill. The decision provided clarity on the retrospective application of the rule and upheld the appellant's entitlement to have their capacity determined based on the rules in force at the time of parameter declaration.
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