GANPATI INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN this appeal filed by M/s.Ganpati Industries, the issue involved is whether the liability to pay Central Excise duty can be redetermined under Section 3A(4) of the Central Excise Act and whether the Commissioner had rightly taken the capacity of induction furnace for the purpose of charging the Central Excise duty under Rule 96 ZO(3) of the Central Excise Rules.

(2.) SHRI R. Santhanam, learned Advocate, submitted that the Appellants manufacture M.S. ingots in their induction furances installed in their factory; that induction furnace of 3 M.T. was supplied and installed by M/s. Inductotherm (India) Ltd. in 1995; that after introduction of Section 3A of the Central Excise Act, the appellants on 22.08.1997 made the declaration of the capacity of furnace as 3 M.T. and also enclosed the manufacturer's invoice dated 31.03.95 with technical specifications; that the appellants were discharging their duty liability @ Rs. 5 Lakhs under Rule 96ZO(3); that subsequently the Commissioner under order dated 19.03.98 for the period from 01.09.97 to 30.09.97 determined the capacity as 18,464 M.T. and for the period from 01.10.97 determined the capacity as 10,464 M.T. as per order dated 27.03.98; that the appellants made a request on 06.01.98 for redetermination of the capacity. The learned Advocate further submitted that on appeal filed by them the Appellate Tribunals vide final order No. A/653 -655/98 -NB dated 26.09.98, remanded the matter for redetermination of duty payable with reference to the actual production under Section 3A(4) of the Central Excise Act; that on remand the Commissioner under the impugned order dated 07.11.98 maintained his earlier two orders and determined the capacity to be 18464 M.T. upto 30.09.97 and 10,464 M.T. from 01.10.97 disregarding the direction contained in the Tribunal's final order dated 29.06.98.

(3.) THE learned Advocate further mentioned that in view of the Supreme Court judgment in the case of CCE v. Venus Castings (P) Ltd., 2000 (117) E.L.T. 273 (S.C.), he would not press for the redetermination of annual production capacity on the basis of actual production under Section 3A(4) upto the period 31.05.98. He further mentioned that in view of the decision of the Supreme Court in this case an Assessee may opt out of the procedure under Rule 96ZO(3) for a subsequent period and seek determination of annual capacity of production and accordingly the appellants' capacity should be redetermined w.e.f. 01.06.98 as they had made a request for redetermination of their capacity on the basis of actual production on this date. In support of his contention he also relied upon the decision of the Tribunal in the case of Shivangi Steel Pvt. Ltd. v. CCE, Kanpur, Final Order No. A -494/2000 -NB dated 14.06.2000 wherein the Tribunal remanded the matter to the Commissioner for determining the annual production capacity as the Appellants had withdrawn the option to pay duty in accordance with the provisions of Rule 96ZO(3) and had opted to pay duty on the basis of actual production under their letter dated 15.04.98 and 30.04.98. Regarding duty liability before 01.06.98 the learned Advocate submitted that as per the invoice issued by the supplier the capacity of the furnace is only 3 M.T.; that in respect of said furnace the capital goods credit was allowed to them on production of invoice, and, therefore, the findings of the Commissioner that the appellants have only supplied commercial invoice and not excise invoice, that only after a lapse of 14 months the Appellants had submitted photocopy of invoice dated 31.03.95 and there was no correlation between these invoices and the furnace installed in their factory are not correct. He finally submitted that the calculations on the basis of which the capacity of the furnace was determined to be 3.27 M.T. attached with the impugned order does not indicate as to how 3.27 M.T. was arrived at. The learned Advocate, therefore, pleaded that the capacity of the furnace may be taken to be 3 M.T. as per invoice issued by the supplier.