2002 (5) TMI 176 - AT - Central Excise

Summary

Issues:
1. Determination of annual production capacity of the induction furnace unit.
2. Dispute over the sanctioned load of electricity and its impact on capacity determination.
3. Interpretation of Rule 3 of the Induction Furnace Annual Capacity Determination Rules, 1997.
4. Request for remand of the case for re-determination of production capacity.

Analysis:

1. The appeal concerns the determination of the annual production capacity (ACP) of the appellant's induction furnace unit for non-alloy steel ingots/billets. The Commissioner initially fixed the ACP at 3.2 MT, based on declarations and certifications. The appellants contested this, arguing that their sanctioned electricity load of 1300 KW (instead of 1600 KW) limited the furnace's capacity to 2.6 MT. The Commissioner's order-in-appeal upheld the 3.2 MT capacity, prompting the appeal.

2. The appellants claimed that their furnace's ACP should be 2.6 MT due to the inadequate sanctioned load. However, the Commissioner, supported by the record, found that despite the lower electricity load, the furnace's actual capacity remained 3.2 MT. The appellants' own submissions acknowledged the 3.2 MT capacity, albeit with requests for a lower determination based on load constraints. The Rule 3 of the Induction Furnace Annual Capacity Determination Rules, 1997, emphasizes determining capacity based on actual furnace specifications, not electricity load.

3. Rule 3 of the Rules 1997 outlines the method for determining furnace capacity, emphasizing actual specifications over electricity load. The rule allows for capacity determination based on comparable furnaces or relevant material if invoices are unavailable. In this case, the invoice confirmed the furnace's 3.2 MT capacity, which the appellants did not dispute. The rule precludes using electricity load as the basis for capacity determination.

4. The appellants sought a remand for re-determination based on furnace measurements. However, since they acknowledged the furnace's 3.2 MT capacity, the request was deemed unnecessary. The Commissioner's decision to maintain the ACP at 3.2 MT was upheld, as the appellants' failure to utilize full furnace capacity did not justify a lower capacity determination. The appeal was dismissed, affirming the validity of the Commissioner's order regarding ACP determination.

In conclusion, the judgment upholds the Commissioner's determination of the appellant's induction furnace unit's ACP at 3.2 MT, rejecting claims for a lower capacity based on electricity load constraints and emphasizing adherence to Rule 3 of the Induction Furnace Annual Capacity Determination Rules, 1997.