2018 (12) TMI 85 - AT - Central Excise

Valuation - determination of annual production capacity - rejection of refund claim - whether the Furnace installed in the premise of the appellant is Batch type or Pusher type? - Held that - Batch type Furnace is always slow in heating because the material is heated batch-wise whereas the Pusher type Furnace is always high capacity furnace wherein the material is heated continuously and keeps on moving. Now from the facts it is to be ascertained that the Furnace of the appellant is slow type or high speed. The rolling mill of the appellant was held by the Commissioner as slow speed. In that circumstance in terms of the decision of this Tribunal in the case of Surendra Steel Rolling Mills 2003 (4) TMI 305 - CEGAT NEW DELHI it cannot be said that the Furnace installed in the factory premises of the appellant is of Pusher type and the same is held as Batch type as claimed by the appellant - the appellant is having one furnace of slow speed and having a rolling mill of Batch type and accordingly their ACP is to be determined. Matter remanded back to the adjudicating authority to determine the Annual Production Capacity and thereafter to calculate the duty payable by the appellant further to determine whether the appellant is entitle for refund or not? - appeal allowed by way of remand.

Summary

Issues involved:
- Determination of annual production capacity
- Type of furnace installed
- Refund claim rejection

Analysis:

Issue 1: Determination of annual production capacity
The appellant operated a hot steel re-rolling mill manufacturing non-alloy steel products. The capacity was initially determined by the Commissioner as 25584.558 MT per annum. However, the appellant made changes to the declared parameters, leading to a challenge in the capacity determination. The matter involved considerations such as the type of furnace and the guidelines for determining capacity when multiple mills are present but only one is operational. The Tribunal, in a previous round of litigation, had observed that the capacity should be determined based on the guidelines considering the presence of two mills but one furnace. This observation was reiterated in the current judgment, leading to the setting aside of the impugned orders and a remand to the adjudicating authority for a reassessment of the annual production capacity.

Issue 2: Type of furnace installed
The crucial aspect under this issue was whether the furnace installed by the appellant was a Batch type or Pusher type. The appellant claimed it was a Batch type, contrary to the adjudicating authority's determination of it being a Pusher type. The Tribunal analyzed the distinction between the two furnace types based on heating capacity and material movement. Referring to a previous case, it was established that the appellant's mill was a slow-speed one, aligning with the characteristics of a Batch type furnace. Consequently, the Tribunal concluded that the furnace was indeed a Batch type, not a Pusher type, and directed the adjudicating authority to determine the annual production capacity accordingly.

Issue 3: Refund claim rejection
The appellant's refund claim was rejected along with the determination of the annual production capacity. The Tribunal's decision to remand the matter back to the adjudicating authority for reassessment of the capacity also encompassed a review of the refund claim eligibility. The direction included calculating the duty payable by the appellant and assessing the refund claim status, with instructions to sanction the refund if found valid. The disposal of the appeals was contingent on the reassessment of these aspects by the adjudicating authority, ensuring a comprehensive review of both the production capacity and the refund claim.

In conclusion, the judgment addressed the complexities surrounding the determination of annual production capacity, the type of furnace installed, and the rejection of the refund claim. By delving into the technical aspects and legal guidelines, the Tribunal provided a detailed analysis leading to the setting aside of the impugned orders and a remand for a thorough reassessment by the adjudicating authority.