TMI Blog1999 (6) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 2. Briefly the issue concerns Order-in-Original No. 3/99, dated 25-1-1999, wherein the learned Commissioner has determined the annual capacity of production of their induction furnace under Section 3A of the Act together with the notifications therein including Notification No. 20/97-C.E. (N.T.), dated 25-7-1997 prescribing the Induction Furnace Annual Capacity Determination Rules, 1997, which are effective from 1-8-1997, subsequently made re-effective from 1-9-1997. 3. Heard Sri J. Sankarraman, learned Advocate and Sri P. Kamala Vishnu, learned Consultant for the applicants and Sri S. Kannan, learned DR. 4. The learned Advocate submits that as provided under Section 3A, the annual capacity of the induction furnace is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capacity of furnace is to be determined on the basis of the capacity declared on invoice than the actual capacity has to be within the range of capacity shown in invoice but for minor variation. In this case, the actual capacity as ascertained varies with the invoice capacity by 40%. That means either invoice does not pertain to the furnace installed or assessee has carried out changes in the furnace subsequently. Although the rules provided for determination of the induction furnace capacity on the basis of invoices produced, there is no prohibition for verification and demand of duty according to the law. The furnishing of invoice with a capacity which does not tally with the actual production amounts to misdeclaration. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which resulted in the said capacity fixation of the order dated 23-9-1997. He submits that only if such an invoice is not available, then can the Commissionerate take resort to sub-rule (2) thereof for fixation of the capacity in terms of either comparable furnaces or otherwise by best judgement. Since at the initial stage, such an invoice was made available, it was considered and even after taking advice of the Chartered Engineer, the said invoice was found reliable and accordingly the capacity was fixed initially, therefore, the Commissionerate is now totally prevented from taking resort to sub-rule (2) ibid at any stage. The learned Advocate further submits that Rule 4 is the only rule which provides for a review of the said capacity. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t judgment method. This method was based on the actual verification of two heats and was therefore, not arbitrary or subjective. The learned DR further submits that since initially fixation was based on the declaration by the manufacturer in the form of invoice produced, therefore, when it was found that there was mis-declaration remedial action clearly lies with the revenue and the power to re-determine, when there is a mis-declaration, is inherent in rule. 9. We have carefully considered the rival submissions and the records of the case. We find that the learned Advocate has built up a strong prima facie case in the applicants favour for the following reasons :- (a) The basic principle involved behind the determination of annual capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner to ascertain the total capacity of the furnace on the basis of that invoices. To us, the import of this Rule is two fold. Firstly, if the invoice is called for and it is submitted, then normally the capacity shall have to be fixed on the basis of the said invoice. Secondly, only if the Commissioner harbours some misgivings/doubts about the genuineness of the invoice i.e. that the invoice may not pertain to the furnace which is actually existing, then he has to make necessary enquiries in this regard and then to base his decision on the evidence which is collected by the Department by such enquiry to the effect that the invoices tendered were not pertaining to the equipment under consideration and is therefore not an invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, having great merit. (d) We also find merit in the submission of the learned Advocate that nowhere does the rule enjoin them to declare annual capacity, the only burden that sub-rule (1) of Rule 3 supposes on them is on being called upon to do so by the Commissioner to supply an authenticated copy of invoice, we note it is not disputed that they have fulfilled this duty. Supply of a such document cannot in our considered prima facie opinion tantamount to a declaration of the capacity of the production. What is supplied is merely evidence on facts. Evidence on facts supplied is distinct from a declaration under law. 10. In view of the aforesaid analysis and consideration we are of the prima facie view that the applicant has therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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