9911796707
TMI Blog2002 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... higher duty amount is payable by the appellant on account of re-determination of the annual capacity of production. A penalty of Rs. 25 Lakhs has also been imposed on the appellant. This appeal challenges those findings. 2. The facts of the case are that the hot steel re-rolling mills are liable to pay duty on compounded levy basis in terms of Section 3A of the Central Excise Act. The compounding is done based on the annual capacity of production of the machinery installed in a re-rolling mill. Further, the annual capacity of production is determined by the jurisdictional Commissioner based on information about the machinery furnished by the re-rolling mill. The present appellant furnished the particulars of machinery and the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual capacity of production. It is contended that Department of Revenue had laid down the method for determining the annual capacity in its Circular No. 331/47/97 CH dated 30-8-97. The appellants have pointed out that para 4 (a) of the Circular had stated that the term "nominal center distance" is the "pinion center distance of the pinion stand connecting the last re-rolling mill drive of the finishing mill excluding any pinch roll, which is not a finishing stand." It is the appellants' contention that their mill has 3 pinion stands and "C" is the last pinion stand connecting the last rolling drive of the finishing mill. This position had been accepted and annual capacity determined by the Commissioner in terms of the rules in his order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, the Commissioner was right in holding that capacity was to be determined taking into account the 'd' factor relevant to the pinion stand "A" to which the last rolling mill drive of the finishing mill had been connected. 4. This is a case of payment of duty at compounded rates in terms of Section 3A of the Central Excise Act. The basis for compounding is the annual capacity of production of the machinery installed. Actual production is not to be taken into reckoning. The appellant had declared the relevant particulars of machinery installed in his factory and the same had been accepted and annual production capacity determined by the Commissioner under Hot Re-Rolling Steel Mills Annual Capacity Determination Rules. Once the dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Nor is the assessee entitled to any remission for short period of dislocation. The exceptions to this arrangement is prolonged non-production or change in the installed capacity. The adjudication proceedings do not concern either type of case. It is also clear from a perusal of the Circular No. 331/47/97-CX dated 30-8-1997, that the 'd' factor relevant for determining the capacity of production is "the pinion center distance of the pinion stand connecting the last rolling mill drive of the finishing mill excluding any pinch roll." It is not in dispute that according to the layout of the appellants' mill, pinion stand "C" was the last. It was so at the time of filing of application for compounding, it remained so during the visit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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