2003 (3) TMI 207 - AT - Central Excise

Summary

Issues:
Challenge to determination of Annual Capacity of Production by Commissioner, Central Excise under two Orders-in-Original; Disregard of binding Orders and directions of Tribunal by Commissioner; Applicability of Rule 96ZO(1) and Rule 96ZO(3) of Central Excise Rules; Dispute over actual production versus determined production; Interpretation of Section 3A(4) of Central Excise Act; Relevance of RG I Register/RT 12 returns in determining actual production; Burden of proof on Appellants to establish lower production; Discretion of Commissioner to determine actual production; Exercise of discretion by Commissioner; Remand of cases for fresh decisions.

Analysis:
The appeals filed by M/s. Dina Metals Ltd. and M/s. Dina Mahabir Re-Rollers Pvt. Ltd. challenge the determination of their Annual Capacity of Production by the Commissioner, Central Excise under two Orders-in-Original. The Appellants argue that they have always paid duty on actual production under Rule 96ZO(1) and Rule 96ZP(1) of the Central Excise Act, and not under Rule 96ZO(3) as determined by the Commissioner. They rely on Supreme Court judgments emphasizing the optional nature of payment procedures under the Act. The Appellants contend that the Commissioner disregarded the Tribunal's Orders and wrongly determined duty liability based on assumed production rather than actual production.

The Departmental Representative argues that the Commissioner has the power under Section 3A(4) of the Central Excise Act to determine actual production after considering evidence presented by the assessee. The Department contends that the Appellants failed to provide sufficient evidence to support their claim of lower production, shifting the burden of proof onto them. The Department emphasizes the need for an analytical assessment of all relevant facts by the Commissioner in determining actual production, highlighting the Commissioner's discretion in this regard.

The Tribunal, after considering both sides' submissions, emphasizes the importance of Section 3A of the Central Excise Act in charging excise duty based on production capacity. The Tribunal acknowledges the Appellants' reliance on the S.G. Multicast case, which clarifies the process for determining actual production when disputed by the assessee. The Tribunal agrees with the Department that the Commissioner has the authority to determine actual production independently, requiring evidence from the assessee to support their claim of lower production.

In conclusion, the Tribunal allows both appeals by way of remand, directing the Adjudicating Authority to determine actual production based on evidence presented by both parties. The Tribunal emphasizes the need for the Commissioner to exercise discretion judiciously and conduct a thorough assessment of the evidence to determine the actual production accurately. The burden of proof remains on the Appellants to establish their claim of lower production, ensuring a fair and just determination of duty liability.