2000 (1) TMI 348 - AT - Central Excise

Summary

Issues involved:
1. Calculation of annual production capacity under Rule 3 of the Hot Air Stenter Independent Textile Processors' Annual Capacity Determination Rules, 1993.
2. Inclusion of galleries in the calculation of the number of Chambers in Stenter machines.
3. Application of Rule 3(3)(i) of the Hot Air Stenter Rules 1998 and Ministry's clarification on the inclusion of galleries in production capacity computation.
4. Denial of principles of natural justice and effective opportunity of hearing.

Analysis:
1. The judgment concerns the calculation of annual production capacity under Rule 3 of the Hot Air Stenter Independent Textile Processors' Annual Capacity Determination Rules, 1993. The impugned order fixed the annual capacity of production at Rs. 9,99,06,303/- with a duty of Rs. 2,00,000/- per month per Chamber. The appellants sought a stay of the operation of the order to challenge the calculation.

2. The main issue raised was the inclusion of galleries in the calculation of the number of Chambers in the Stenter machines. The appellants argued that the galleries do not contribute to the capacity of the Stenter and should not be considered. They referred to a previous Tribunal order that highlighted the importance of considering technical opinions and ensuring no denial of justice in similar cases.

3. The Department reiterated that the decision to include galleries was based on Rule 3(3)(i) of the Hot Air Stenter Rules 1998 and a Ministry clarification requiring the galleries to be taken into account for production capacity computation. The Tribunal noted that similar disputes had been remanded previously for reconsideration based on technical opinions and principles of natural justice.

4. The Tribunal found that the inclusion of galleries without issuing a show cause notice resulted in a denial of principles of natural justice. Citing previous decisions and the importance of providing an effective opportunity of hearing, the Tribunal set aside the impugned order and remanded the matter to the original authority for reconsideration on a de novo basis after notifying the appellants of the grounds for revising declared capacities.

This detailed analysis highlights the key issues, arguments presented, legal provisions applied, and the Tribunal's decision to ensure fairness and adherence to principles of natural justice in the calculation of annual production capacity for the Hot Air Stenter machines.