2016 (1) TMI 523 - HC - Central Excise

Determination of annual capacity of production (ACP) - type of furnace - batch type or pusher type - manufacturing of Hot re-rolled products of non-alloy steel viz., M.S. Flats, angles, bars and rods. - The assessee though initially filed declaration under the statute describing the furnace as pusher type , based on which monthly duty liability was fixed at ₹ 78,625/-, subsequently realizing the mistake that the furnace is batch type and not pusher type , filed revised declaration along with Chartered Engineer s Certificate for redetermination of duty liability. - Held that - From the material on record, it could be seen that the above report of the NISST was given to the assessee in advance and after affording personal hearing and as the assessee has not lead any rebuttal evidence in the form of any Chartered Engineer s Certificate, the authority below has categorically recorded finding on technical aspect that the subject furnace of the assessee is pusher type and rejected the claim of the assessee. Based on certificate of NISST and the material on record, the contention of the learned counsel for the assessee that the mill is low speed mill and the authorities treating it as high speed mill, fixed higher annual production capacity and demanded higher duty, cannot be countenanced and the judgments cited in this regard are not applicable to the facts of the case. - Decided against the assessee.

Summary

Issues:
- Determination of furnace type for levy of monthly duty liability under Hot Re-rolling Mills Annual Capacity Determination Rules, 1997.

Analysis:
1. The appellant, involved in manufacturing hot re-rolled products, initially declared its furnace as 'pusher type' for determining annual capacity of production (ACP). The Commissioner fixed ACP at 1592 mts. per annum based on this declaration. Subsequently, the appellant revised the declaration, stating the furnace was 'batch type,' leading to a higher ACP determination at 3145 MT per annum. The appellant contested the 'pusher type' classification, leading to a series of orders and appeals.

2. The Customs, Excise and Gold (Control) Appellate Tribunal remanded the matter for de novo consideration, emphasizing the need to fulfill two tests: presence of a pusher mechanism for material charging and movement of material inside the furnace during heating. The NISST verified the furnace and issued a certificate stating it was 'pusher type.' The Commissioner upheld this classification, leading to further appeals by the appellant.

3. The appellant argued that their furnace lacked automatic operation mechanisms, crucial for a 'pusher type' classification. They contended that the mill being a low-speed one should influence the furnace type determination, citing relevant judgments. The Standing Counsel supported the Tribunal's decision, dismissing the appeal.

4. The High Court considered whether the Tribunal's decision upholding the duty liability determination and classifying the furnace as 'pusher type' was correct. The NISST certificate, based on technical observations, confirmed the presence of a pusher mechanism and material movement inside the furnace, supporting the 'pusher type' classification.

5. The Court noted that the appellant failed to provide rebuttal evidence against the NISST report. The lower authority also considered the appellant's production declarations and the nature of the mill, concluding that the furnace was 'pusher type' based on technical assessments.

6. The Court upheld the lower authority's findings, emphasizing the transparency of the inspection process and the concurrence of the appellate Tribunal. It dismissed the appeal, finding no legal grounds to interfere with the technical determination of the furnace type and the consequent duty liability.

7. The judgment clarified that the appellant's arguments regarding the mill's speed and related judgments were not applicable to the case's specific facts. The Court concluded that the technical findings and assessments adequately supported the 'pusher type' classification, justifying the duty liability determination.

8. Therefore, the High Court dismissed the appeal, finding no merit in challenging the furnace type classification and the duty liability determination under the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997.