SATNARAYAN STEEL INDUSTRIES AND Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) All the above appeals involved a common issue and are hence heard together and disposed by this common order, after waiving requirement of predeposit since the issue in dispute stands settled by the decision of the Larger Bench of the Tribunal in the case of Sawan Mal Shibumal Steel Rolling Mills v. CCE, Chandigarh -I [2001 (42) RLT 75 (CEGAT -L.B.)].

(2.) The appellants are manufacturers of hot re -rolled products of non -alloy steel by operating a hot steel re -rolling mill. They are liable to pay duty at compounded rates in terms of Section 3A of the Central Excise Act, 1944, and the duty is determined depending on the Annual Capacity of Production, or such factor relevant to the annual capacity of production of the factory in terms of Sub -section (2) of Section 3A of the Central Excise Act. The Hot Rolling Steel Mills Annual Capacity Determination Rules 1997 issued under Sub -section (2) of Section 3A of the Central Excise Act lay down, how the annual capacity of hot re -rolling mills is to be determined. The appellants opted for payment of duty on compounded basis. Since this annual capacity determined was less than the actual production of the mill during the financial year 1996 -97, the Commissioner ordered that annual capacity shall be deemed to be equal to the production of the mill during financial year 1996 -97, in terms of Rule 5 of the Re -Rolling Steel Mill Annual Capacity Determination Rules 1997. Subsequently the appellants applied for change in parameters for calculation of the annual capacity, and recalculated capacity was less than the annual capacity earlier determined. However since Rule 5 provided that in case the annual capacity determined by the formula in Sub -rule (3) of Rule 3 in respect of a mill is less than the actual production of the mill during the financial year 1996 -97, then the annual capacity so determined shall be deemed to be equal to the production during 1996 -97, the Commissioner in all these cases applied the annual capacity of 1996 -97. even after change in parameters and ever after reduction in annual capacity. It is the contention of the appellants, based upon the Larger Bench decision cited supra that Rule 5 which permits adoption of actual production of 1996 -97 does not apply in all cases of change in annual capacity on account of change in machinery, and it is their contention that it is Rule 4(2) of the Rules that will be applicable in a case of change in annual capacity.

(3.) Ld. DR reiterated the findings of the adjudicating authority that Rule 5 will continue to govern situations where there is a change in capacity due to parameters and is not confined to only cases where there is no change.