SRI RAMAKRISHNA INDUSTRIES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) HEARD the learned counsel for the appellant and Standing Counsel for the Central Excise, for the State of Telangana. The appellant is the assessee and is involved in the manufacturing of Hot re -rolled products of non -alloy steel viz., M.S. Flats, angles, bars and rods. It initially filed declaration under the statute for determining unit's annual capacity of production (ACP), describing its furnace as of 'pusher type' and accordingly, based on verification, the Commissioner, by proceedings dated 30 -8 -1997, fixed the ACP at 1592 mts. per annum and imposed duty liability at Rs. 19,900/ - per month. Again based on a revised declaration by the assessee dated 10 -9 -1997, the Commissioner determined the ACP as 3145 MT per annum and liability was imposed at Rs. 78,625/ - per month. The case of the assessee is that their furnace was having a screw pusher mechanism by which material is charged and there is no contrived movement of the material by way of conveyor belt or chain in the furnace of the assessee's factory and hence the furnace of the assessee has to be treated only as 'batch type' and accordingly the unit's ACP has to be determined for imposing monthly duty liability. The assessee though initially filed declaration under the statute describing the furnace as 'pusher type', based on which monthly duty liability was fixed at Rs. 78,625/ - by the order of the Commissioner dated 16 -9 -1997, subsequently realizing the mistake that the furnace is 'batch type' and not 'pusher type', filed revised declaration along with Chartered Engineer's Certificate for redetermination of duty liability. Based on the report of the Range Superintendent dated 19 -5 -1998, the Commissioner, by order dated 27 -10 -1998, rejected the claim of the assessee and ordered to treat the furnace of the assessee as 'pusher type' and duty liability as determined in order dated 16 -9 -1997 was confirmed. Aggrieved by the same, the assessee filed appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench, Madras (for short 'CEGAT') in Final Order No. 581/1999. By order dated 17 -3 -1999, the Tribunal holding that as the Commissioner has applied only the first of two tests i.e., that there is a presence of pushing mechanism by which material is charged into furnace and as the report of the said Superintendent who had inspected, was silent with respect to the second test, as to whether there is any movement of materials inside the furnace, while the furnace is heating the same, set aside the Order -in -Original No. CEX - 29/98, dated 27 -10 -1998 passed by the Commissioner and remitted the matter back for de novo consideration after giving opportunity to the assessee. The Commissioner was given liberty to cause re -verification/re -inspection of the furnace of the assessee by any technical authority to enable him to apply the aforementioned two tests in the matter and was directed to make available the result of the technical authority to the assessee before considering the matter on de novo basis. After remand, the Commissioner required the National Institute of Secondary Steel Technology (NISST) based in Mandi Gobindgarh, Punjab, to cause verification of the furnace of the assessee. Accordingly, a team of officers of NISST visited the furnace of the assessee on 30 -10 -1999 and on verification, issued certificate dated 8 -11 -1999 stating that the furnace of the assessee is 'pusher type'. The said report was made available to the assessee and eventually, based on the certificate of NISST dated 8 -11 -1999, the Commissioner concluded that the furnace of the assessee is 'pusher type' and rejected by the claim of the assessee by Order (Original) No. C. Ex. 06/2000 dated 10 -2 -2000. Challenging the same, the assessee filed appeal on the file of Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bengaluru. By the impugned order dated 23 -8 -2004, the appeal was dismissed. Aggrieved by the same, the present appeal by the assessee.

(2.) THE learned counsel for the assessee contended that, as directed by the CEGAT in its remand order dated 17 -3 -1999, for determining the furnace as 'pusher type' two tests, are to be fulfilled viz., (1) that there should be a pusher mechanism, by which the charged material is pushed into the furnace and (2) that there should be movement of the material inside the furnace while heating is on. The case of the appellant, as stated above, is that their furnace was having a screw pusher mechanism by which material is charged and there is no contrived movement of the material by way of conveyor belt or chain in the furnace of the appellant's factory and hence the furnace of the appellant has to be treated as batch type only and accordingly the unit's ACP has to be determined for imposing monthly duty liability. In other words, he contended that in order to treat a furnace as pusher type, there shall be a mechanism installed inside the furnace for the purpose of automatic operations and whereas in the present case, there is no mechanism installed inside the furnace for the purpose of automatic operation and the movement of the material while the same is heated inside the furnace. He also alternatively contended that the finding that the furnace is of 'pusher type' is not sufficient to determine the annual production capacity of a mill under Hot Re -rolling Mills Annual Capacity Determination Rules, 1997 and it has to be further examined as to what is the type of the mill that is installed in the factory and if the mill is slow speed mill, then the furnace cannot be held to be having pusher type furnace as the same cannot be installed for a low speed mill. He stated that the mill of the assessee is low speed mill and this factor has not been taken into consideration by the NISST team. He submitted that the authorities without considering these aspects, found that the assessee is having furnace with pusher type mechanism, thereby treating it as high speed mill and fixed higher annual production capacity and demanded higher duty. In support of this contention, the learned counsel also relied on the judgments reported in Surindra Steel Rolling Mills v. Commissioner of C. Ex. , Chandigarh - : 2003 (155) E.L.T. 175 (Tri. -Del.) and V.V.S. Concast Ltd. v. Commissioner of Central Excise, Allahabad - : 2002 (139) E.L.T. 81 (Tri. -Del.).

(3.) THIS court admitted the appeal to consider the following questions of law: