ARADHANA INDUSTRIES PVT. LTD. Vs. CCE

JUDGEMENT

(1.) In this appeal, filed by M/s. Aradhana Industies Pvt. Ltd., the issue involved is whether refund of Central Excise duty is admissible to them.

(2.) Shri Willingdon Christian, learned Advocate, submitted that the appellants are engaged in the process of man -made fabrics; that the Commissioner (Appeals), under order dated 24.12.98, decided the annual capacity on provisional basis pending verification of the stenter machines and correctness of their declaration; that after the verification, the Deputy Commissioner, under the Order -in -Original No. 2660/2000 dated 14.11.2000, determined their total capacity of production including length of galleries; that, subsequently, in view of the orders passed by the Commissioner (Appeals), Surat, relying upon the decision of the Larger Bench of the Tribunal in the case of Sangam Bhilwara Processors Ltd. v. CCE, 2002 (82) ECC 196 (LB): 2001 (42) RLT 429 (CEGAT -LB) the galleries are not forming part and parcel of the Hot Air Stenter, they filed the refund claim on 2.11.2001 claiming refund of duty paid on account of including the length of galleries in Hot Air Stenter; that, subsequently, the hon'ble Supreme Court has also held in the case of CCE, Jaipur -II v. SBPL, 2003 (85) ECC 252 (SC) : 2002 (53) RLT 644 (SC), that the galleries attached to either side of stenter do not add the process of heat setting or drying of fabrics and as such not deemed to be chamber; that their refund claim has been rejected by the Revenue on the ground that the Order -in -Original, determining their annual capacity of production, was not challenged by them and a favourable decision in someone else case cannot result in consequential relief to them. Ld. Advocate, further, submitted that as their annual capacity of production was determined provisionally by the Dy. Commissioner, the same could have been determined finally also by the Commissioner and as such, the finalisation of their annual capacity of production by the Deputy Commissioner is ab initio void; that Rule 4 of Hot Air Stenter Independ Textile Processors Annual Capacity Determination Rules, 1998 provided that the Commissioner may determine the annual capacity of production on provisional basis pending verification of the declaration furnished by the independent processors; that as per Rule 4, it was the Commissioner, who was to confirm the annual capacity; that thus, the order passed by the Deputy Commissioner has been passed in excess of authority and without jurisdiction; that, moreover, the Deputy Commissioner has passed the order in violation to the principles of natural justice, that it has been held by the Madras High Court in the case of Gemini Metal Works v. Union of India, 1986 (7) ECC 51 (Mad) : 1985 ECR 245.7 (Madras) that it is well established by now that an order, which is found to be void for violation of principles of natural justice, can be attacked in collateral proceedings initiated on the basis of such void order. He, therefore, contended that the present proceedings, relating to denial of refund claim filed by them, are collateral proceedings in which the order passed by the Deputy Commissioner is ab initio void can be challenged.

(3.) Countering the arguments, Mrs. Charul Barnwal, learned SDR, submitted that it is not disputed by the learned Advocate that the order, determining the annual capacity of production passed by the Deputy Commissioner, has not been challenged by them in any Appellate Forum and had attained finality; that Rule 4 of Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 was amended by Notification No. 26/2000 -CE (NT) dated 31.3.2000; that by this amendment, the Deputy Commissioner of Central Excise or the Assistant Commissioner were empowered to determine the annual capacity of production; that when the Deputy Commissioner in November 2000 determined their annual capacity of production, he was empowered to determine the capacity as per Rule 4; that thus, the capacity has not been determined by the Deputy Commissioner in excess of authority and without jurisdiction. She, finally, submitted that as the Deputy Commissioner's order has attained finality, the same cannot be challenged by way of filing the refund claim. She relied upon the decision of the Hon'ble Supreme Court in the case of CCE v. Flock (India) Pvt. Ltd., 2000 (71) ECC 4 (SC) : 2000 (120) ELT 285 (SC).