2003 (11) TMI 254 - AT - Central Excise

Summary

Issues: Determination of duty liability under Compounded Levy Scheme based on annual capacity of production; Justification for different capacities determined for different periods; Duty demand during the period of closure; Applicability of previous Tribunal decisions on duty demand for closed period.

Analysis:
1. The appellant, a re-rolling unit, was required to discharge duty liability under the Compounded Levy Scheme, where duty is based on the annual capacity of production determined by the Commissioner of Central Excise. The appeal was against an order determining the annual capacity of the appellant's unit for different periods.

2. The appellant argued that the capacity determination for different periods lacked justification. They had informed about the maintenance work and production stoppage from 1-8-97, with production resuming on 13-11-97. The appellant contended that duty demand should be based on a 'd' factor of 158 mm for the entire period of production, and no duty should be determined for the closed period.

3. The appellant cited Tribunal decisions to support their argument that no duty demand could be made for the closed period. The Tribunal examined the records and submissions, confirming that the unit was closed until 13-11-97. It was acknowledged that the 'd' factor after repair was 158 mm, requiring capacity determination based on this factor for the entire period.

4. The Tribunal found no justification for adopting a higher 'd' factor for the previous period, concluding that the Commissioner erred in fixing different production capacities for different periods. As a result, the appeal was allowed, and the appellant was directed to pay duty according to the lower capacity determined based on the 'd' factor of 158 mm. No duty levy was applicable for the period when the mill was closed from 1-8-97 to 13-11-97.