1998 (5) TMI 289 - AT - Central Excise

Summary

Issues:
Application to set aside order under Rule 3(4) of Induction Furnace Annual Capacity Determination Rules, 1997.

Analysis:
The stay application filed by M/s. Arihant Steel sought to set aside the order passed by the Commissioner of Central Excise, Delhi, under Rule 3(4) of the Induction Furnace Annual Capacity Determination Rules, 1997. The Advocate for the applicants highlighted Rule 3(1) of the Rules, emphasizing the procedure for determining the Annual Production Capacity of Induction Furnaces. The Advocate presented certificates from the furnace manufacturer and the National Institute of Secondary Steel Technology, indicating the furnace capacity as 1 Ton. Referring to previous Tribunal orders, the Advocate argued that the Commissioner failed to consider these certificates, breaching the procedure outlined in Rule 3. The Tribunal noted the non-speaking order by the Commissioner, who determined the furnace capacity at 2,000 M.T. despite the certificates showing 1 M.T. The Tribunal found no justification for the Commissioner's alternate method inquiry under Rule 3(2) when valid certificates were provided. Consequently, the Tribunal accepted the applicant's prayer to set aside the Commissioner's order and remanded the matter for a fresh determination of the furnace capacity under the Rules with a proper and reasoned order.

The Departmental Representative (DR) referred to a certificate from the National Institute of Secondary Steel Technology, questioning its availability to the Commissioner during the order's passage. The DR could not clarify the basis for the Commissioner's determination of the furnace capacity at 2 M.T. The DR mentioned a study report indicating a breakdown during the inspection, preventing the observation of furnace operation. The Tribunal observed the lack of details in the Commissioner's order regarding the inquiry conducted under Rule 3(2). Despite certificates and evidence supporting a 1 M.T. capacity, the Commissioner's decision to determine the capacity at 2,000 M.T. without proper justification was deemed unjustified. The Tribunal emphasized that if the Commissioner doubted the validity of the certificates, reasons for rejection and further inquiry under Rule 3(2) should have been provided. As a result, the Tribunal granted the applicant's request to set aside the Commissioner's order and instructed a fresh determination of the furnace capacity in accordance with the Rules.

The Tribunal, after considering the submissions and the lack of reasoning in the Commissioner's order, concluded that the order was non-speaking and lacked proper justification for disregarding the certificates indicating a 1 M.T. capacity. The Tribunal found no need for an alternate inquiry under Rule 3(2) when valid certificates were presented. Consequently, the Tribunal accepted the applicant's plea to set aside the Commissioner's order and remanded the matter for a fresh determination of the furnace capacity in compliance with the Rules, emphasizing the need for a proper and reasoned order.