9911796707
TMI Blog2009 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1-4-1999 for fixation of Annual Production Capacity (for short APC) for the financial year 1999-2000. Appellants also filed a revised declaration on 4-5-1999 declaring three cylinders of size of 3 Mtrs in length and 3.54 Mtrs in width and one drying cylinder of 1.36 Meter length. Jurisdictional Deputy Commissioner reported that the Chartered Engineer appointed by the appellants had certified the length of the drying cylinder as 1.75 Mtrs instead of 1.36 Mtrs as declared by the appellants in their revised declaration dated 4-5-99. Based on verifications reports, the Commissioner provisionally fixed the production capacity at Rs.536.74 lakhs and annual duty liability at Rs.68.695 lakhs for the year 1999-2000 which was communicated to the appellants on 1-11-1999. Consequent to budget changes, from 1-3-2000 APC for the month of March was modified and communicated to the appellants on 19-5-2000 based on the declaration filed by them on 1-3-2000. The appellants represented against the provisional fixation on 1-11-1999 vide their letter dated 13-1-2000 and after a personal visit and personal hearing, the Commissioner fixed the APC finally for the year 1999-2000 vide his Order No. 9/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Commissioner dated 20-7-2001 which was the Adjudication Order with reference to show cause notice issued consequent to the visit of the officers to the unit on 30-4-1999 wherein the APC for the period from 16-12-1998 to April 1999 was re-fixed and seized fabrics were confiscated etc.. The present impugned order has been passed by taking up both the issues remanded by the Tribunal. In the impugned order the Commissioner has decided that the length of the drying range cylinders has to be taken for the purpose of APC from 16-12-1998 onwards up to 31-3-2000 and he has also confiscated the seized fabrics demanded differential duty consequent to re-fixed APC with interest as applicable, has imposed penalty of equal amount in respect of duty demand arising as a result of revised fixation of APC for 1998-1999 has confiscated plant and machinery and has imposed penalties. 4. M/s Jai Ambe Textiles hereinafter referred to as the appellant have filed appeal against this order. In addition to the above an appeal filed by the Revenue against the order of Commissioner (Appeals) dated 12-9-2003 is also before us. In this case the Commissioner (Appeals) has set aside the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in detail submitted that appeal has to be allowed. 6. The learned DR. relies on the rationale adopted by the Commissioner in his order for fixation of A and confiscation of seized fabrics etc. 7. We have considered the submissions made by both the sides in detail and have pursued the records also in detail. 7.1 The first point the learned advocate vehemently argued was that the order of the Commissioner amounted to a review of his own order which he was not empowered to do and therefore the order itself is totally invalid. The argument of the learned advocate is that once APC was fixed on the basis of verification reports submitted by the officers of the department on filing a declaration on 23-12-1998, the APC stood fixed final thereafter. He submitted that the order of the Commissioner dated 21-4-1999 communicating the APC was final and if any modification was required, the department should have filed an appeal against this order. He relies on the following decisions in support of this contention. (i) Pooja Castings Pvt. Ltd. - 2004 (163) E.L.T. 356 (Tri-Bang.) (ii) Sunny Textiles Ltd. -2006 (205) E.L.T. 518 (Tri-Bang.) (iii) Nakaoda Steel Mills Pvt. Ltd. - 2002(150) E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brics, cleared during that financial year; (iii) for the textile fabrics produced by the new units or the closed units of such factory for which it is not possible to calculate average value under sub-clause (ii), the average value of such fabrics shall be as declared by the independent processor at the time of making the declaration, provided that the amount of duty payable on such fabrics shall be re-worked out at the end of a financial year on the basis of actual average value of the textile fabrics produced in the financial year in such factory' (iv) the average value of production per chamber per month as: (a) in the case of fabrics of average value of upto and including Es. 30 per square metre, Rs.11.72 lakhs, and (b) in the case of fabrics of average value of exceeding Rs.30 per square metre, Rs.15.63 lakhs. (4) the Commissioner of Central Excise shall, as soon as may be, after determining the annual capacity of production on the basis of the average value of processed textile fabrics and the number of chambers (of a hot-air stenter) of the factory of the independent processor, by an order, intimate the same as also the rate of duty applicable to the in dependent proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned advocate regarding APC fixation is that Commissioner could not have relied upon the observations of the Commissioners in the orders in original passed on 15-2-2001 and 23-42-2003 since both of them have been set aside. Before we proceed to dispose the correctness of APC fixed, this contention has to be considered and disposed of. We do not find any substance in this argument. The order passed by the Com missioner on 15-2-2001 was set aside by the Tribunal vide order dated 26-6-2001 and the matter was remanded to the Commissioner directing him to re-examine the matter in the light of the decision of the Larger Bench of the Tribunal in San garn Processors Bhilwara Ltd. v. C.C.E., Jaipur reported in 2001 (127) EL.T. 679 (Tri. LB) and it was also observed that the other issue regarding drying range cylinder may also be reexamined in the light of that decision. Therefore in terms of the decision of the Tribunal the Commissioner was required to exclude the galleries for the purpose of APC as held by the Larger Bench of the Tribunal and in the light of the observations he was also required to examine whether the drying range cylinders are to be considered as galleries. The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is adjudicating upon the Order-in-Appeal made by the Commissioner (Appeals) in which the Order-in-Original has merged. As the order made by the Tribunal is an appealable one, it should be ensured that it is founded on cogent reasons. The reasons contained in an order may not be lengthy or elaborate but, at the same time, they must reflect proper application of mind and an understanding of the pros and cons of the matter, as well as the legal position, which has led the Tribunal to come to its conclusion, more so, when the conclusion arrived at by the Tribunal differs from the conclusion arrived at by the adjudicating and Appellate Authorities.' 7.6 From the above it is quite clear as to what is required is that the Commissioner has applied his mind and has not blindly followed somebody else's opinion. In this case the Commissioner has not simply relied upon the observations of other Commissioners in their orders which becomes quite clear from the reproduced relevant para below:- "12(V) The second issue to be decided is whether cylinder is to be taken into account for fixation of APC as per Explanation I of the APC Rules. I have gone through the contention of the assessee in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondence File 1999-2000 6. RCA Register 1999-2000 7. All the correspondences of the department from the period December, 1998 till 4-10-2006 including a verification report dated 28-10-1999 issued by office of the Superintendent of Central Excise AR IV, Division V, Ahmedabad-1 to Deputy Commissioner of Central Excise Division-V, Ahmedabad-1." 7.9 As observed rightly by the Commissioner, these documents, photo graphs and video graphs have not been relied upon for the purpose of fixation of APC for the year 1999-2000 by the Commissioner. Therefore the plea made by the appellants before the Tribunal when the appeal and stay petition against the order of the Commissioner dated 23-12-2003 fixing the APC for the year 1999-2000 was taken up that they have not been provided the documents and photograph listed above and therefore principles of natural justice has not been observed was not correct. The documents, photographs and the video graphs related to the visit of the officers on 30-4-1999 which resulted in issue of a show cause notice on 27-10-1999 and also resulted in a separate adjudication order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the drying range is 175 cms, it does not have mechanical or electric drive and it has a function of remove and squeeze out the extra water from the fabrics and simultaneously through airing of the fabric. Shri Deepak C. Shah has further elaborated his opinion given on 5-5-1999, on 19-6- 1991 where he states that the drying range is at about 3/2 feet from the stenter machine. Both the experts have said that the cylinder range cannot be said to be attached to the Hot Air Stenter machine. The experts have also said that the ap pellants have a separate drying range located separately from the Hot Air Stenter line. 8.3 The first dispute raised by the appellants is that the length of the drying cylinder has been taken wrongly as 175 cms. In view of the expert's opinion, Chartered Engineer's opinion and appellants' own declaration, the length of the cylinder has to be taken as 175 cms and therefore on this ground Commissioner's order has to be upheld. 8.4 The next important aspect is whether the drying range cylinder has to be included for the purpose of working out APC. The first contention of the appellants is that the drying range cylinder is not physically attached and there fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge cylinders and fed into stenter the setting time in the stenter will be less i.e. the unit can attain more productivity while maintaining the required quality. Such drying range cylinders are introduced before stenters so as to get more and faster production as the setting time in the stenter are reduced. it is also not required that drying range cylinder should be physically attached. Physical attachment is not the criteria. The purpose is that drying range cylinders are a step before the stenters. The cloth is automatically fed into the stenter from the drying range cylinder. Such drying range cylinders are meant for particular stenter machines. These are aligned and placed in such a way along the drive force that cloth can automatically and directly go into the stenter. Drying range cylinders are installed in such a fashion that after drying the cloth on drying range cylinder these are fed into stenter directly for continuous process. CCE Ahmedabad's Trade notice 25/99 dated 1-3-99 specifically clarifies that as per explanation Ito Notification No. 42/98-Ce (NT) a float drying machine or any other equipment of a length 305 metres installed in or attached to the stenter for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing the drying range to a stenter as it is the mechanical form of state which pulls the fabric in a continuous chain and no separate mechanical devise is needed for attaching the drying range. In view of the above discussion we find that without relying upon any of the evidence recovered by the officers during their visit on 30-4-1999 except panchnama and the statement of the Proprietor both of which have not been disputed and both have been supplied to the appellants other evidences such as declarations, visit of the Commissioner himself, expert opinion are sufficient to arrive at the decision which the Commissioner has reached. Therefore the Commissioner's order fixing APC for 1999-2000 has to be upheld. 9. The second part of the impugned order deals with the show cause notice issued to the appellants on 27-10-1999 proposing to revise the APC and consequently fixing the duty liability for the period from 16-12-1998 to 30-4-1999 at Rs.6,77,419/- with interest as applicable. 9.1 Commissioner has confirmed demand of Rs.3,97,894/- with interest and has also imposed equal amount of penalty under Rule 96 ZQ and a pen ally of Rs. 10,000/- under another sub rule of 96 ZQ of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the year 1999-2000, as far as 1998-1999 APC is concerned, the order has Lobe set aside. 9.5 The next issue is the seizure of excess fabrics found by the officers during their visit to the unit on 30-4-1999. The appellants had requested for documents and photographs and video graphs which have been discussed earlier, from the department on 29-5-2001 and on 30-5-2001, the Additional Com missioner (Preventive) had replied to the appellants wherein he had explained that photographs and video graphs are not relevant in view of the fact that Annual Production Capacity for the year 1999-2000 had been finally determined by the Commissioner who had taken into account the declaration filed by the appellants on 1-4-1999 the revised declaration filed by them on 4-5-1999, the Chartered Engineer's certificate filed by them on 5-5-1999 and the personal visit of the Cornmissioner. Therefore he had clearly informed that the question of supplying the video clippings or photographs does not arise since the APC has been finally decided and the photographs and video clippings are not relevant. He also in formed him that as far as non accountal of the fabrics is concerned, the RG-1 register an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been filing returns thereafter which shows clearly that the appellants were allowed to take whatever details are required from the old lot register and the RG-1 register to continue their operation. Therefore we do not find any justification in the claim of the appellants that because documents were not supplied, principles of natural justice have not been observed since the absence of the documents, photographs and video clippings have in no way affected the defence of the appellants. The methodology adopted for the search and the result achieved as per the panchnama also shows that the officers and the panchas had adopted the correct procedure of taking the total stock of fabrics lying in various stages in the factory and comparing the same with the lot numbers and the lot register and RG—1 stock. This is the proper way of ascertaining the stock. Therefore we do not find any justification in the contention of the appellants that excess fabrics found during the visit of the officers are not liable to confiscation. Further, Shri Mahendrabhai had clearly admitted that the seized fabrics were processed and kept unaccounted with an intention to remove them without payment of duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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