MOIRA WIRES LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE Commissioner held that "However, keeping in view the capacity rules and the trade parlance - there will always be only one ACP for the entire mill of MWL irrespective of the size of the bars produced and obtained at different stands. Therefore, the ACP in above situations will be either 4074 MTs (lowest) or 8931 MTs (highest). Before deciding which will be the proper ACP, I would like to discuss the meaning of word "capacity". This word gives an idea about output, dimensions, size, volume, area etc. always related with maximum amount, quantity, number, weight etc. which can be received or contained. If we say that the capacity of the oil well is 150 barels a day means maximum quantity of oil that can be taken out in a day is 150 barels. Similarly, a container is having capacity of 100 litre means maximum 100 litre of any liquid can only be stored/kept in that container. On the same analogy, the word capacity used in the rule is related to yearly production which would always be maximum production that mill is capable of producing. Accordingly, the ACP of the mill will be 8931 MTs being maximum in all situations. Accordingly, I pass following order. Having considered all the situations diagrams, statement, submissions of the party, facts and circumstances of the matter, discussions and finding as above. I have determined the ACP of the mill of M/s. Moira Wires Limited lebad as 8931 MTs. Accordingly, I hold that the capacity of the said mill is 8931 MTs effective from 20 -12 -1997. "Being aggrieved by this order, the appellants have filed captioned appeal.

(2.) THE facts of the case briefly stated are that the appellants manufacture non -alloy rerolled steel products. They took over another unit M/s. Parda Steels P. Limited which was adjacent to M/s. MWL on 30 -8 -1997. With effect from 1 -9 -1997, the factory position has been changed. Govt. of India amended law and introduced Section 3A providing composite scheme for payment of duty based on the ACP. This ACP was required to be determined on the basis of value of different parameters. The appellants manufacture different goods i.e. 10 mm bars, 12 mm bars and 20 mm bars for which different stands were required. For 12 mm bars 9 stands were required, for 16 mm bars 7 stands were required, for 20 mm bars 9 stands were required and for 25 mm bars 7 stands were required. The Commissioner found that for the manufacture of these goods 5 different finishing mills with different pinion stands are required and, therefore pinion centre distance was necessary. For production of 8 mm and 10 mm CTD bars pinion centre distance was 205 mm. For 16 mm CTD bars pinion centre distance was 260 mm. For 20 mm CTD bars pinion centre distance was 250 mm and for 25 mm CTD bars pinion centre distance was 250 mm. It was held by him that the capacity in view of the varying pinion centre distance will be different for products of different CTD bars. He, therefore held that the capacity is always related to the maximum amount/quantity/number, weight etc. and, therefore held that the said mill's ACP is 8931 MTs from 20 -12 -1997.

(3.) SHRI R. Santhanam, ld. Advocate submits that the appellant's case was based on pinion centre distance and that taking that centre distance as 205 mm, the ACP of their mill comes to 4121 MTs per year. He submits that this fact was known to the department and was verified by them. He submits that the appellants produced a majority of 8/10 mm CTD bars and, therefore pinion centre distance meant for production higher CTD bars cannot be taken as ACP. He submits that the ACP as held by the Commissioner is different for different CTD bars. He submits that since there is no finding as to which bars were being produced and that the only factor that remain to be determined is the actual production of the appellants. He submits that the nominal centre distance is pinion centre distance of the pinion stand connecting the last rolling mill drive of the finishing mill. He submits that ACP is to be determined about nominal centre distance of the pinion stand No. 11 connecting the last rolling mill drive of the finishing mill which is 205 mm and that the ACP works out to be 4074 MTs. He submits that the Commissioner has adopted a reasoning not based on the facts inasmuch as ACP has been calculated on the basis of one middle stand marked as stand No. 9 in the series of stand No. 1 to 11. He submits that the examples cited by the Commissioner are not applicable to the rerolling mills. He submits that in their case highest production to the tune 64% during September 1997 to March 1998 is made from the last stand and not from stand No. 9 which is used for production 12 mm bars. He submits that comulative production of mill of the appellants for the year 1996 -97 is given as 2895.630 MTs and the production for this period of the other mill taken on lease is 2496.815 MTs. He submits that comulative total of both mills in 1996 -97 is 5392.445 MTs. He submits that in Rule 5 of Annual Capacity Determination Rules, 1997 as amended by Notification No. 45/97, it is laid down that in case ACP determined by the formula in Sub -Rule (3) in respect of a mill, is less than the actual production of the mill, the ACP so determined shall be deemed to be equal to the actual production of the mill during the financial year 1996 -97. He submits that the Commissioner had not taken into account the 'd' value of the last stand which had been reduced from 260 mm to 205 mm while determining, the ACP of their mill. He submits since the actual production of the appellants was known to the department, the ACP determined on the basis of 'd' value of 260 mm of stand No. 9 was not required. He submits that the department cannot determine the value based on a different 'd' value and therefore prays that the appeal may be allowed.