UNITED BLEACHERS LTD. Vs. CCE

JUDGEMENT

(1.) APPEAL No. E/1213/2001 filed by the assessee is against order dated 19.9.2001 passed by the Commissioner of Central Excise, Coimbatore confirming demand of duty of over Rs. 1.10 crores against them for the period 16.12.1998 to 31.5.2000 under Rule 96ZQ(3) the Central Excise Rules, 1944. The Commissioner also ordered recovery of interest on duty in terms of Rule 96ZQ(5)(i) of the Rules. He also imposed penalty equal to duty under Rule 96ZQ(5)(ii) of the Rules. The above demand of duty is based on Annual Capacity of Production (ACP) determined by the Commissioner for the above period, wherein rail length of galleries was also included as part of total rail length of stenter. After noticing that the Hon'ble Supreme Court had held galleries to be excluded from the stenter dimension for the purpose of determination of ACP of independent textile processor, learned Commissioner revised the ACP of the appellants and raised fresh demand of duty against them. A part of this demand, covering the period 16.12.98 to February 2000, was made through Order No. 16/2004 dated 21.4.2004, and the rest of the demand covering the period June 2000 to February 2001 was made through Order No. 7/2005 dated 11.2.2005. Each of these orders also demanded interest on duty and imposed a penalty in the aforesaid manner. These orders dated 21.4.2004 and 11.2.2005 are under challenge in Appeal Nos. E/986/2004 and E/308/2005 respectively.

(2.) AFTER examining the records and hearing both sides, we find that a major part [16.12.1998 to February 2000] of the period of dispute covered by Appeal No. 1213/2001 is overlapped by the period of dispute covered by Appeal No. E/986/2004. Appeal No. 1213/2001 is against a demand of duty based on the original determination of ACP by the Commissioner and Appeal No.E/986/2004 is against the revised demand of duty based on revised ACP determined by the Commissioner. Appeal No. E/308/2005 is against the revised demand of duty for the period June 2000 to February 2001. In view of the two appeals filed against demands of duty based on revised ACP, the earlier Appeal No. 1213/2001, which is against the demand of duty based on original ACP determined by the Commissioner is infructuous and the same is dismissed.

(3.) IN Appeal Nos. 986/2004 and 308/2005, the major contention raised by the appellants is one with reference to certain provisions of Rule 3 of the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. Rule 3 of the said rules laid down the method of determination of ACP of an independent textile processor, for the purpose of payment of duty under Rule 96ZQ read with Section 3A. One of the factors required to be considered in the context of determination of ACP was mentioned in Clause (i), which reads as under: