2014 (8) TMI 283 - AT - Central Excise

Determination of annual production capacity - induction furnace capacity - Tribunal remanded matter for de novo determination, directing that annual production capacity should be taken into consideration and the copy of the verification report should be supplied - Commissioner again records the fact, of the Asstt. Commissioner having forwarded a report dated 24.8.2005 informing that the appellant paid duty on the basis of the furnace capacity of 3 M.T. during the period 1.9.97 to 31.3.98; but had short paid duty for the subsequent period i.e. April, 1998 to June, 1998 and that some duty is due for the later period - Held that - The Commissioner fails to record a finding whether the appellant remitted the Excise Duty due on the capacity of 3 M.T. for the relevant period i.e. 1.9.97 to 31.3.98. The Commissioner also fails to record a finding whether the report of the Asstt. Commissioner (as to the appellant having paid correct duty for the relevant period) is accepted. To this extent, the impugned order violates the mandate of this Tribunal s order dated 9.3.2001. In the operative portion of the Order, the Commissioner records that the capacity of furnace is 3 M.T; and the annual production capacity is fixed at 9600 MT. On this aspect the appellant has no grievance. The Commissioner further ordered that the appellant shall pay Duty accordingly including the interest payable, within 10 days of receipt of the order. It is not clear from the impugned order, the analysis therein and in particular the concluding portion, as to whether the direction to pay Duty and interest, is in respect of the period which was the subject matter of remand. In terms of the order of this Tribunal dated 9.3.2001, the relevant period is 1.9.97 to 31.3.98. The subsequent period viz. April, 1998 to June, 1998 was wholly beyond the jurisdiction of the Commissioner to observe, analyse or adjudicate - In the light of the chronology of events adverted to above, it is clear that the Learned Commissioner has passed a clearly erroneous and patently perverse order - Therefore, matter is remanded back - Cost of ₹ 10,000 imposed on revenue - Decided in favour of assessee.

Summary

Issues:
1. Determination of annual production capacity for payment of duty under Central Excise Act, 1944.
2. Discrepancy in payment of excise duty based on furnace capacity.
3. Compliance with Tribunal's order for recording findings on excise duty payment.
4. Jurisdiction of the Commissioner in making observations beyond the remand period.

Analysis:
1. The appellant, a manufacturer of M.S. Ingots, appealed against the adjudication order by the Commissioner of Central Excise, Kanpur regarding the determination of annual production capacity for duty payment under the Central Excise Act, 1944. The appellant opted for duty payment under Rule 96 ZO(3) of the Central Excise Rules until 31.03.1998, based on the induction furnace capacity. The initial annual production capacity was provisionally fixed at 9600 MT and later confirmed at 10016 MT for the relevant period from 01.09.97 onwards.

2. The appellant faced discrepancies in excise duty payment based on furnace capacity, leading to multiple appeals and remands. The Commissioner's order was challenged due to the failure to determine if the appellant paid excise duty correctly for the period 1.9.97 to 31.3.98 as per the annual production capacity. The Commissioner's order included observations beyond the remand period, causing confusion and raising concerns about the jurisdictional limits.

3. The Tribunal found the Commissioner's order erroneous and perverse as it did not comply with the directions to record findings on excise duty payment based on the annual production capacity determined. The order to pay duty and interest within 10 days lacked coherence and analysis, violating the Tribunal's mandate. The Commissioner was remanded to record a finding solely on whether the appellant paid excise duty correctly for the period 1.9.97 to 31.3.98.

4. The Tribunal set aside the impugned order due to its perversity and lack of coherent analysis, emphasizing the avoidable litigative trauma caused to the appellant. The appeal was allowed with costs of &8377; 10,000 payable to the appellant within four weeks. The matter was remanded to the Commissioner for a specific finding on excise duty payment compliance, highlighting the need for disciplined and accurate analysis in legal proceedings.