2003 (4) TMI 452 - AT - Central Excise

Summary

Issues:
- Challenge to the determination of Annual Capacity of Production by the Commissioner
- Dispute regarding duty payment based on actual production
- Claim for abatement of duty

Analysis:
1. Challenge to Annual Capacity of Production: The appellant, a steel manufacturer, contested the Order-in-Appeal confirming the duty demand based on the Annual Capacity of Production fixed by the Commissioner. The appellant argued that the calculation of their production capacity was incorrect and should be based on a different formula under the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997. They cited relevant case laws to support their claim that actual production should determine duty liability. However, the Tribunal noted that the appellant did not challenge the fixed capacity earlier and had paid duty accordingly. The Tribunal held that the appellant is liable to pay duty based on the capacity determined by the Commissioner.

2. Dispute over Duty Payment: The appellant claimed that they had requested a re-determination of their production capacity based on actual production, as allowed under Section 3A(4) of the Central Excise Act. The appellant argued that they were forced to pay duty on a higher capacity than their actual production. The Tribunal observed that the appellant's request for re-determination was made after the period in question for the demand of duty. The Tribunal emphasized that the appellant's failure to challenge the initial capacity determination led to their duty liability based on that capacity. The Tribunal rejected the appellant's argument for duty payment based on actual production.

3. Claim for Abatement of Duty: The appellant alternatively claimed entitlement to duty abatement due to their unit's closure during the relevant period. However, the Department contended that no abatement claim was made earlier and cannot be raised at the Tribunal stage. The Tribunal highlighted that without a formal abatement claim, they cannot consider the appellant's plea for duty reduction due to factory closure. The Tribunal differentiated this case from previous judgments where duty options were changed, emphasizing that the appellant's request for re-determination came late and did not warrant interference with the duty demand. The Tribunal upheld the rejection of the appeal, stating that the appellant's failure to challenge the capacity determination and absence of an abatement claim led to their duty liability as determined by the Commissioner.