2015 (10) TMI 1694 - AT - Central Excise

Demand of differential duty - Fixation of Annual Production Capacity - Held that - Facts of the present case are squarely covered by the decision of Tribunal in the case of Alwar Processing Pvt. Limited (2014 (12) TMI 156 - CESTAT NEW DELHI). It is noted that the Tribunal has followed the decision of the Hon ble Gujarat High Court in the case of Krishna Processors (2012 (11) TMI 954 - GUJARAT HIGH COURT). In view of that, the impugned order cannot be sustained - Decided in favour of assessee.

Summary

Issues:
1. Dispute over the number of chambers and Annual Production Capacity determination.
2. Applicability of Rule 96ZQ omission on proceedings initiated before the rule's removal.
3. Interpretation of saving clauses and liabilities under Section 3A of the Central Excise Act post-omission.

Analysis:
1. The appellants, engaged in fabric processing, faced a dispute on chambers and Annual Production Capacity, leading to a demand notice for differential duty. The Tribunal remanded the matter for fresh adjudication, resulting in duty confirmation and penalties.
2. The issue revolved around the omission of Rule 96ZQ without a saving clause. The Revenue argued that proceedings initiated pre-omission would continue, but the Tribunal disagreed, citing precedents like Krishna Processors and Alwar Processors Pvt. Limited cases.
3. The High Court's decision clarified that post-omission of Rule 96ZQ and Section 3A without a saving clause, pending proceedings would lapse automatically. The Tribunal's decision aligned with this interpretation, leading to the dismissal of the Revenue's appeal and setting aside the impugned order in the present case.

In conclusion, the judgment resolved the disputes regarding capacity determination and applicability of omitted rules, emphasizing the automatic lapse of pending proceedings post-omission without saving clauses. The decision followed legal precedents and upheld the dismissal of the Revenue's appeal, setting aside the impugned order in favor of the appellants.