1998 (12) TMI 279 - AT - Central Excise

Summary

Issues Involved:
Determining annual capacity of steel re-rolled products based on furnace type declarations.

Analysis:

Issue 1: Declaration of Furnace Type
The appellants, manufacturers of steel re-rolled products, filed declarations under Rule 3(1) of the Hot Rerolling Steel Mills Annual Capacity Determination Rules, 1997, with Chartered Engineer certificates. The Commissioner determined annual capacity based on utilised hours, assuming furnaces were of 'Pusher type.' Appellants claimed furnaces were 'Batch type,' attracting lower utilised hours. They argued lack of technical staff led to incorrect declarations.

Issue 2: Verification Process
The appellants contended that they were not notified or involved in verifying furnace types before capacity determination. The Chartered Engineer's certificates later confirmed furnaces as 'Batch type.' The appellants highlighted a trade notice defining 'Batch type' furnaces and requested technical verification. The Revenue argued orders were based on appellants' declarations and previous Chartered Engineer certificates.

Issue 3: Legal Compliance and Technical Verification
The Tribunal noted Rule 3 required the Commissioner to verify declarations and ensure correctness. Lack of verification raised concerns, especially regarding the Range officer's competence. The Tribunal emphasized the Commissioner's duty to consult technical authorities for accurate determinations. The proviso to Rule 4 allowed approval-based capacity determination pending verification.

Issue 4: Procedural Irregularities
Notings on the Commissioner's orders prepared by lower-ranking officials raised doubts about compliance with the Rules. The Tribunal found discrepancies in the order preparation process, indicating potential procedural lapses.

Judgment:
The Tribunal set aside the impugned orders and remanded the cases to the Commissioner for technical determination of furnace types by qualified personnel. The Commissioner was directed to involve the assessees in the verification process and issue appropriate orders in compliance with the Rules. The appeals were allowed by remand, emphasizing the importance of accurate technical verification in determining annual capacity for duty calculation.