DAKSH STEELS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturers of mild steel ingots etc. They discharged their Central Excise duty liability under the Compounded Levy Scheme (Section 3A of the Central Excise Act). This Scheme levies duty based on the capacity of production. The impugned order has determined the capacity of the furnace of the appellant as 3.5 M.T. and annual capacity at 11488 M.T. while the appellant had declared the capacity of the furnace at 3 M.T.

(2.) THE contention in the present appeal is that the authority should have gone by the declaration of the assessee that the furnace capacity was 3 M.Ts. It has been pointed out that the original capacity of 4 M.T. has been reduced to 3 M.T. and this position remains confirmed by invoice No. 507 dated 11.2.1999 of Industofur Engineers INC. During the hearing of the appeal, learned Counsel for the appellant emphasized that in terms of the Departmental instructions the authorities have to go by the capacity as indicated in the invoice for the machinery and they are not to take up separate determination of the capacity. He has emphasized that a determination of the capacity would tantamount to assessing actual production and not discharging of duty based on the capacity of production.

(3.) AS against this, the learned SDR has submitted that, in the present case, sale and purchase of furnace is not involved. The original furnace was of 4 M.T. capacity. The appellants had claimed that the capacity had been reduced to 3 M.Ts and in support of that claim produced the aforesaid invoice of Industofur Engineers. However, verification had shown that the reduced capacity was to 3.59 M.Ts. Learned SDR also pointed out that the invoice -dated 11.2.1999 cannot be taken as an invoice involving the sale of the furnace. Instead it was an invoice for a job work for reduction of coil size from 4 M.T. to 3 M.T. capacity. The learned SDR has contended that such a job work invoice cannot be taken as an invoice indicating the sale of a furnace of a particular capacity.