TMI Blog2001 (11) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... only by notification. Under Sec. 4 of the Act, guidelines to departmental officers to determine the value for the purpose of collection of duty has been prescribed. According to Sec. 3 of the Act, such a levy and collection of duty can be done only in such manner as may be prescribed on all excisable goods which are produced or manufactured in India at the rate mentioned under the Central Excise Tariff Act, 1985. 4.A new scheme was introduced under Act 26 of 1997 by inserting Section 3A which came into effect with effect from 14-5-97. According to the said provision, the Central Government was given power to charge excise duty on the basis of capacity of production in respect of notified goods. A Notification No. 41/98-C.E. (N.T.) to 44/98-C.E. (N.T.) and 36/98-C.E., dated, 10-12-98 was issued in this regard. The said new scheme applies to only independent processors of specified textile fabrics. According to the said notification, the rate of duty applicable is Rs. 1,50,000/- per chamber per month of a unit whose average value of processed textile fabrics does not exceed Rs. 38/- per sq. metre and Rs. 2,00,000/- per chamber per month for the unit whose average value exceeds Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for the respondents submitted that the circular is only clarificatory in nature, and even if the case of the petitioners is acceptable with respect to the clarification, it does not bind on the assessing officers as they should go only by the provisions of the said Act and notifications and the authorities have to decide each case independently on the basis of the notifications. He has also submitted that a mere gallery cannot be taken into consideration, but if it is installed as an integral part of the stenter and aids the process of heat setting or drying of fabrics, it should be taken into consideration for the purpose of determining the annual capacity of production for levy of excise duty. Since the petitioners have not suffered any order on the basis of the circular they cannot sustain these writ petitions at this stage. 9.With a view to introduce a new scheme to determine excise duty on the basis of capacity of production in respect of notified goods, Sec. 3A of the Act was inserted by enacting an Act No. 26 of 1997. According to the said provision, notwithstanding anything contained in section 3, having regard to the nature of the process of manufacture or produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of heat setting or drying of fabrics. If the length of these equipments, namely float drying machine or any other equipment is 3.05 metres, the same will be deemed to be a chamber of Stenter. If it exceeds 3.05 metres, their fractions will also have to be treated as a chamber on a pro rata basis. 11.Certain doubts were raised about the notification. One of the doubts raised was as follows :- Whether closed spaces known as"(IV) 'galleries' on either side of the stenter which are meant mainly for heat-insulation purposes are to be taken into account for purposes of computing the production capacity and number of chambers; and further whether for purposes of capacity determination the length of each chamber is to be measured separately or whether by dividing the total rail length of a stenter by the No. of chambers." The same has been clarified as follows :- "As regards points (IV) and (V), it is clarified that as 'galleries' are installed or attached to the stenter and aid the process of heat setting or drying of the fabrics. These 'galleries' provide heat insulation on either side of the stenter. As per Explanation I to Notification No. 42/98-C.E. (N.T.), a float dryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Northern Bench, New Delhi, in Sangam Processors Bhilwara Ltd. v. Commissioner of C.Ex., Jaipur - 2001 (127) E.L.T. 679, it is held that a gallery which is having not rail, fan or radiator attached to it, cannot come within the purview of the term "any other equipment" as contemplated under Explanation I to Rule 3 of the Rules, 1998. Though the said decision is not having any binding force upon this court, definitely it will bind the respondents. 15.As held by the Apex Court in the decision in Union of India v. Kamlakshi Finance Corporation Ltd.-1991 (55) E.L.T. 433, the Department should pay utmost regard to judicial discipline and give effect to orders of higher appellate authorities which are binding on them. Further, the Apex Court has held as follows:- Shri Reddy is perhaps right in saying"6. that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that if it was accepted, the Revenue would suffer. But what Shri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mala fides but with the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department, the position now, therefore, is that if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal, as the case may be, in the light of these amended provisions there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under S. 35 E(1) or (2) to keep the interests of the department alive. If the officers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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