DIAMOND STEEL ROLLING MILLS Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. Diamond Steel Rolling Mill, is whether the annual production capacity is to be fixed on the basis of production of the year 1996 -97 in case of changes in the machinery installed in the factory.

(2.) SHRI Sidharth Singh, learned Advocate, submitted that the issue involved in the present appeal has been settled by the Larger Bench of the Tribunal in the case of Sawanmal Shibumal Steel Rolling Mills vs. CCE, Chandigarh -1, 2000 (127) ELT 46 (Tribunal -LB). He submitted that initially the value of 'd' factor was 225 mm which was reduced to 209 mm and the Commissioner revised the annual capacity of production; that initially annual capacity production fixed was 6546.226 MT per annum which was revised to 2705.823 MT after the change in 'd' and 'w' factors; that the Commissioner, however, fixed the annual capacity of production as 4417.340 MT per annum on the basis of production during the year 1996 -97 in terms of Rule 5 of Hot Rolling Steel Mills Annual Capacity Determination Rules, 1997; that in view of the Larger bench decision their capacity should remain as 2704.823 MT per annum. Shri Ashok Kumar, learned D.R. fairly agreed that the issue is covered by the decision of the Larger Bench.

(3.) THE issue involved in the present appeal is squarely covered by the decision of the Larger Bench wherein it was held that "Re -determination is occasioned by changes made in the installed machinery. When changes in machinery cause reduction in the annual capacity of production, fixing the annual capacity of production based on the actual production of a previous year, when the capacity of production of the machinery was higher, would be highly unreasonable and it would amount to comparing the uncomparables.' The application of the deeming provision contained in Rule 5 in such a case would be grossly unjust." The Larger Bench held that Rule 5 would have no application when change in machinery leads to reduction in the annual capacity of production, when the same is computed according to the parameters mentioned in Rule 3 of the Hot Rolling Mills Annual Capacity Determination Rules, 1997. Following the ratio of the Larger Bench decision the appeal is allowed.