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TMI Blog1990 (6) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise Licence and subsequent intimation given by them in this regard. The Collector (Appeals) however took note of the facts placed before him and also evidence produced by the appellants including the certificate from the Ministry of Industry who accepted their plea that their productive capacity was 2000 metric tonnes and held that they were entitled to concessional assessment corresponding to this capacity as set out in the notification referred to above. The said Notification No. 128/77 is reproduced below for convenience of reference :- "In supersession of Notification No. 45/73-C.E.,. dated 1st March, 1973, paper other than paper Boards, cigarette tissue, glassine paper, grease proof paper, coated paper (including waxed paper) and paper of substance not exceeding 25 grammes per square metre, and containing not less than fifty per cent by weight of pulp made from bagasse, jute stalks, cereal straw or waste paper manufactured and cleared from a paper mill of the type described in the table below are exempt from so much of the duty of excise leviable thereon as is specified in the corresponding entry in Col.(3) of the said Table : TIME-TABLE S.No. Description of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficiency as certified by the Chartered Engineer is taken into account then installed capacity will automatically be more than 2000 metric tonnes. He stated that the certificate produced by the respondents from the DGTD had merely endorsed the production capacity and not installed capacity. He stated that the installed capacity of the appellants' plant had to be taken to be more than 2000 metric tonnes and in this view of the matter the order of the Collector (Appeals) is not sus-tainable. 4. Shri Gopal Prasad, the learned Consultant for the respondents, stated that the respondents did indicate their estimated installed capacity in 1965 as pointed out by the learned SDR as 2500 metric tonnes. It was pleaded that the machines were old and their efficiency had been falling and therefore the installed capacity should be taken with reference to the year 1977 when the Notification was issued and after which the respondents had taken steps to address the Development Officer in the Ministry of Industry for certification of their installed capacity. He drew our attention to the communication sent by the respondents to the Joint Secretary, Ministry of Industry, Udyog Bhavan, New Delhi and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed a lower installed capacity other than mentioned in the application to DGTD, the onus was on the license to produce the revised installed capacity certificate on the basis of actual installed capacity of machines. He pleaded that even the authorities recognised that installed capacity could change from what was certified earlier. He stated in the light of this, they had approached the concerned Ministry and authorities and obtained the certificate based on the expert opinion and also appreciation of the evidence placed before the Ministry of Industry and their installed capacity had been certified as 2000 tonnes. Point for determination by us is whether based on the evidence placed before us, the installed capacity of the respondents plant can be taken to be 2000 tonnes or more. 5. No evidence has been produced before us to show as to what was installed capacity as envisaged by the manufacturers of the paper plant at the time of the initial installation of the machinery. The respondents, as seen from the records had two machines and one was decommissioned and at the relevant time, only one machine was working. Originally, the respondents declared their installed capacity, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following figures between the years 1967 to 1977 :- Years Production 1967 1,049 tonnes 1968 1.943" 1969 2,113" 1970 2,224" 1971 2,290" 1972 2,163 1973 1,814" 1974 2,001" 1975 1,306" 1976 1,731" It is seen that they have crossed the 2000 tonne mark in four years, the last being in the year 1974. As it is the respondents themselves declared their approximate production as 2500 tonnes in 1965. No material has been placed by the appellants before us to show as to how the capacity of their unit got impaired from 2500 tonnes in the succeeding years so as to become less than 2000 tonnes as claimed by them. The appellants have relied upon certificate of a Chartered Engineer and their productive capacity registration with the Ministry of Industry. The Chartered Engineer has certified the plant capacity as 7.2 tonnes per day but stated that taking the efficiency as 75% the production capacity would be 5.4% tonnes per day with annual capacity as 1944 tonnes. The Chartered Engineer has not given the basis of the efficiency nor has he stated how the capacity of the plant has come down from 2500 lonnes as declared by the respondents and from over 2000 tonnes in 1974. In f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibly on account of damage to any part of their plant or due to any other operational factors. As it is the respondents production crossed 2000 tonnes mark in 1974. This goes to show that the respondents installed capacity was such that even in 1974, they could produce more than 2000 tonnes. Again no material has been placed before us as to why the installed capacity should be taken to be 2000 tonnes in 1977 when the Notification No. 128/77 was issued. We would like to observe that the respondents production figures had been fluctuating. It cannot be take that this was so because the installed capacity had been varying. It can only be that there must have been some other factors responsible for this fluctuation in their production from year to year while the installed capacity remained the same. From the evidence available before us the only conclusion that can be arrived at is that the respondent could produce more than 2000 lonnes. In that view of the matter it has to be held that their installed capacity for the purpose of determination of issue before us was over 2000 tonnes. We hold therefore that Collector (Appeals) was in error in allowing the respondents plea that they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remote past having made a declaration in A/L-4 about capacity of the mill. It may also be pointed out that the prescribed form of application has no column like the installed capacity which may have relevance with reference to Notification 128/77. This apart it appears that the actual production may not correspond with installed capacity. From Shri lyengar's letter it appears that ordinarily the licenced capacity should be treated as installed capacity and according to the endorsement on the respondent's licence the capacity is 2000 metric tonnes. The certificate issued by DGTD should not be discarded on the ground that it was issued for the quantity requested by the respondent because DGTD is a highly responsible body and is presumed to know its responsibility as also the sanctity which might attach to the certificate. If Revenue has any reservation about the certificate, the proper thing to do is not discard the same but to call upon the DGTD to offer clarification or explanation. That, however, Revenue does not propose to do but wants the certificate to be excluded from consideration. I fail to see how Revenue could do this inspite of its own stand as seen from various document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice-President (Judicial) constituting the Special Bench differ on the following point: Whether the installed capacity of the respondent's unit for the purpose of notification 128/77 dated 18.6.77 should be held as not exceeding 2000 metric tonnes on the basis of evidence adduced by the respondent ? 13. The point of difference is, therefore, under section 35D(1) of Central Excises & Salt Act, 1944 read with sub-section (5) of section 129C of the Customs Act, 1962 referred to the President of the Tribunal for decision in accordance with law. [Order per : G. Sankaran, President] - 14. When this matter was taken up, Shri V.Chandrasekharan, the learned DR, raised a preliminary objection and submitted that it would not be proper for me to hear this matter. The objection was in terms of the President's Order No. 137 of 1983 dated 19-9-1983. Clause 5(2) of the order reads as follows :- "Where a member of the Bench having jurisdiction in a matter has decided or dealt with that matter in any other capacity, or does not consider it proper, for any reason, to deal with that matter, President shall allot the matter to a reconstituted Bench which does not include that member, or to another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding recorded in the learned Member (Technical's) opinion that the respondents had admitted that the installed capacity was over 2,500 tonnes per annum was not correct because there was no such declaration by them. He further submitted that, as stated by the learned Vice-President Shri Jha, the DGTD was a responsible public authority and his certificate could not be thrown aside and for this purpose he relied on the Bombay High Court judgment in the case of Bombay Chemicals Pvt. Ltd. v. Union of India and Others 1982 (10) E.L.T. 171. 17. I have considered the submissions of both sides. In the case decided by the Bombay High Court the learned judge felt that the Customs authorities were bound by the contents of the certificate issued by the Director General of Technical Development and that the same could not have been bypassed by holding that it was Issued under mistake or misrepresentation. It was further held that the view taken by the Departmental authority that the quasi judicial authority is competent to interpret and apply the notification and can ignore the certificates issued by the DGTD was erroneous and it was not permissible to go behind it merely because the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated the 11th September, 1978 stating that the Government had, after careful consideration of all factors such as past performance, and the general circumstances obtaining in the Industry, decided to endorse a capacity of 2,000 tonnes per annum for paper including news print, paper board and straw board in the respondents' registration certificates. According to the Ministry of Industry's D.O. letter (referred to earlier) the installed capacity should normally be taken as equivalent to the capacity recognised by Government by way of industrial licence or registration. The Industry Ministry has recognised that the actual production may, however, be lower or higher than the installed capacity. 19. Shri Gopal Prasad has submitted that the respondents did not declare that their annual installed capacity was 2,500 tonnes. The learned Technical Member has recorded in para 3 of his order that the Departmental Representative had drawn the attention of the Bench to the respondent's letter addressed by them to the Superintendent of Central Excise, Lucknow (No. SD/E/49 dated 1-1-1980) having a reference to their earlier letter addressed to the authorities (SD 8145 dated 30-9-1965) wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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