2016 (1) TMI 841 - AT - Central Excise

Determination of ACP on the re-rolled products manufactured and cleared by the appellants under Section 3 (A) - Held that - On scrutiny of the provisional ACP order dated 12.09.1997 and the final order dated 03.04.1998, the Commissioner has fixed the quantity as 14187.978 MT. On perusal of the verification report dated 23.09.97 by the jurisdictional range authorities, we find that the value of nominal diameter and other parameters were certified and found correct. We find that at col.2 relating to normal centre distance of the diameter has been confirmed as 300 mm. Whereas at column 7 for w it has been estimated at 2.466 kgs/mtr. as per the notification No. 32/97, which is meant for d purpose for diameter 311 - 360 mm consequently the higher ACP was arrived resulting to consequential demand. On perusal of the Notification No. 32/97 dated 01.08.97 and the amended notification No. 45/97 dated 30.08.97, the said formula for determination of ACP has been revised for d and w for a normal distance of the diameter ( d ) of 260 - 310 mm, w has been revised to 1.200 kg/per meter. It is confirmed from the verification report of the appellant s, normal distance is 300 mm. Therefore, it is evident that the appellant falls within the category d 261 to 310 mm and automatically for w applicable is 1.200 kg/mtr. and not 2.466 kg/mtr. In view of the above, and also considering that the Hon ble Madras High Court in the case of Triveni Alloys Ltd. Vs. Cestat, Chennai - 2014 (306) ELT 617 (Mad.) and this Tribunal has already remanded the case under Section 3. Thus we hold that revised value of d and w is applicable for the appellant case. Accordingly, the impugned order is set aside and remanded to the Commissioner for re-fixing the ACP by applying the correct formula as per the amended notification No. 4/97 -NT dated 30.08.97, by taking the d and w diameter for 300 mm (d) and 1.200 kg/mtr. - Decided in favour of assessee of remand.

Summary

Issues:
- Determination of Annual Capacity Production (ACP) under the compounded levy scheme.
- Interpretation of Central Excise Tariff Act provisions.
- Application of amended notifications for ACP calculation.
- Review of previous Tribunal orders and High Court decision.

Analysis:
1. Determination of ACP: The case involved the manufacture of re-rolled products falling under specific sub-headings of the Central Excise Tariff Act. The dispute arose regarding the calculation of ACP under the compounded levy scheme from 1997 to 2000. The appellant contested the ACP calculation based on discrepancies in the application of the formula for ACP determination.

2. Interpretation of Provisions: The appellant argued that the ACP was provisionally fixed and subsequently finalized by the Commissioner without considering an amended notification that revised the values for calculating ACP. The appellant contended that the ACP should have been recalculated based on the revised notification to avoid the duty demand raised by the Range Superintendent.

3. Amended Notification Application: The Tribunal scrutinized the original and amended notifications related to ACP calculation. It was noted that the revised notification altered the values for specific parameters used in determining ACP. The Tribunal found that the appellant fell within the category affected by the revised values, leading to a different ACP calculation compared to the one applied by the Commissioner.

4. Review of Previous Orders: Considering the discrepancies in the ACP calculation and the impact of the amended notification, the Tribunal set aside the impugned order and remanded the case to the Commissioner for re-fixing the ACP based on the correct formula as per the amended notification. The decision was influenced by previous Tribunal orders and a High Court decision that supported revisiting ACP calculations in similar cases.

In conclusion, the Tribunal allowed the appeal by remanding the case for a fresh determination of ACP, emphasizing the importance of applying the correct formula as per the amended notification to avoid erroneous duty demands.