JAMMU CASTING PVT. LTD Vs. UOI

JUDGEMENT

(1.) Petitioner Company is dealing with the business of manufacture of non alloy steel ingots and billets. The said goods are chargeable to duty in terms of Section 3 of the Central Excise Act, 1944 (here-in-after referred to as the Act of 1944), read with the notification dt. 1st of Aug'97, and this is done on the basis of the annual capacity of the production of the unit. In the case of the petitioner, the said annual capacity of production was determined as 9600 MT on the basis of 3MT furnace under Rule 3(4) of Induction Furnace Annual Capacity Determination Rules, 1997(here-in-after referred to as the Rules of 1997). The petitioner erected a new furnace of 4MT with verbal information to the authority concerned on 30th of Tune'99, and started commercial production of the goods from the said furnace also.

(2.) As no approval was obtained by the petitioner from the authority concerned for erection of a new furnace, as required under Rule 3(4) of the Rules of 1997, and as it was found that the petitioner Company is making the production by operating both the furnaces intermittently not provided under the relevant rules, a notice dt. 4th of Oct'01, came to be issued to the petitioner to explain as to why the annual capacity of production of the petitioner unit be not determined on the basis of two furnaces installed by it w.e.f. 1st of Oct'99. The said notice was challenged by the petitioner before the appellate authority i.e. Commissioner, Central Excise Com-missionerate, Chandigarh-II, by pleading that there is no justification in determining the capacity of the factory to 7 MTs suo moto and that too with retrospective effect from 1st of Oct'99.

(3.) The aforementioned plea of the petitioner Company was rejected by the Commissioner and it was directed vide aforementioned order that the Annual Capacity of the unit be determined as 22,400 MT w.e.f. 1st of Oct'99. The Company was also directed to discharge duty liability for the period from 1st of Oct'99 to 31st of March'2000, in terms of Rule 96ZO(3) of the Central Excise Rules, 1944. The said order was appealed against by the petitioner before the Customs Excise & Gold (Control) Appellate Tribunal, New Delhi. The said Tribunal, vide its order dt. 1st of Jan'03, has dismissed the appeal of the petitioner with the following observations:-