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M/s. Shalimar Ispat Versus C.C.E. Raipur

2015 (7) TMI 499 - CESTAT NEW DELHI

Determination of the annual capacity of production of the appellant - determination of the annual capacity of production of Hot Rolling Mills on the basis of information to be furnished by the mill to the jurisdictional Central Excise officer. - Held that:- Since Rule 5 had been introduced w.e.f. 1.9.1997 by notification no., 45/97-CE (NT) dated 30.08.1997, in our view this cannot be given retrospective effect when the notification itself makes it effective w.e.f. 1.9.1997. Therefore, in our vie .....

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e that in the present case the declaration under Rule 3(1) had been made on 18.8.1997, Rule 5 would not be applicable and as such the Apex Court s Judgment also in the case of Doaba Steel Rolling Mills (2011 (7) TMI 10 - SUPREME COURT OF INDIA) would not be applicable. In view of this, the impugned order is not sustainable. The same is set aside. - Decided in favour of assessee. - Excise Appeal No. E/1299/2003-Ex[DB] - Final Order No. 52004 /2015 - Dated:- 25-6-2015 - Hon ble Mr. Rakesh Kumar, M .....

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passed by the Hon'ble High Court in Writ/Review petitions, the Hon'ble Apex Court have directed this Tribunal to proceed with the hearing on merits of the case, without being influenced by any kind of concession that was given at the earlier point of time. Hence, without considering the earlier orders passed on the disputed issue, the appeal is being taken up for hearing. 2. Background of the case, leading to this appeal, are summarized herein below :- 2.1 Section 3A was inserted in the .....

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1997"), effective from 01.08.1997. The Rules,1997 prescribed the formula for determination of the annual capacity of production of Hot Rolling Mills on the basis of information to be furnished by the mill to the jurisdictional Central Excise officer. The said Rules, 1997 were famed, containing the rules from 1 to 4. 2.2 However, by Notification No. 45/97-C.E. (N.T.) dated 30.08.1997, the Rules, 1997 were amended w.e.f. 01.09.1997. The effect of the amendment was that Rule 5 was inserted af .....

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xcise asked for certain information vide letter dated 04.09.1997, which were provided by the appellant vide its letter dated 15.09.1997. In the said letter, the appellant inter alia, stated that though rolls of 210 mm Dia was originally installed in the factory, but due to some problem, the capacity of the said Dia rolls was changed in April' 1997, and in its place, 185 mm Dia rolls was installed. Vide the said letter, the appellant requested the Central Excise authorities to determine the c .....

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e basis of the formula prescribed in sub rule (3) of Rule 3 of the Capacity Determination Rules, 1997 by taking the nominal centre distance as 195 MM was 3613 MT, the actual production during 1996-1997 was 6054 MT and accordingly the Commissioner held that in view of Rule 5 of the Capacity Determination Rules, 1997, the annual capacity of production would be 6054 MT. Against the above order of the Commissioner, the appellant filed the appeal before the Tribunal. The Tribunal vide final dated 16. .....

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rmination Rules, 1997, once again determined the annual capacity of production as 6054 MT based on the actual production during 1996-1997 as the production during 1996-1997 6054 MT was higher than the production determined in terms of formula prescribed in Rule 3(3) of the Capacity Determination Rules. 2.6 Being aggrieved by the above order of the Commissioner, the appellant filed appeal before the Tribunal. The Tribunal vide final order dated 18.04.2006 reported in 2006 (206) ELT 294 held that .....

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rt (Tax Case No. 39/2006). Hon ble High Court disposed of the said appeal vide order dated 11.10.2012 by which the matter was remanded to the Tribunal with observation that Hon ble Apex Court in the case of CCE vs Doaba Steel Rolling Mills reported in 2011 (269) ELT 298 SC had occasion to interpret the aforesaid Rule 5 of the Capacity Determination Rules, 1997 which decision was rendered after the impugned order passed by the Tribunal. In Pursuance of the above order of the High Court this matte .....

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s by Notification No. 45/97-CE (NT) dated 30.8.1997 w.e.f. 1.9.1997. Hence the said Rule 5 is not applicable to the instant case and the annual capacity of the appellant is required to be worked out in terms of the formula contained in Rule 3(3) without applying Rule 5, as the appellant had made the required declaration regarding their parameters in terms of Rule 3(1) of the Capacity Determination Rules, 1997 on 18.08.1997. Since the required declaration under Rule 3(1) of the Capacity Determina .....

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nce such a provision came w.e.f. 1.9.1997, the same cannot be applied in those cases where the declaration for determination of annual capacity of production was made during period prior to 1.9.1997. (2) The Apex Court in the case of Doaba Steel Mills has held that from the language of Rule 5 it is evident that where annual capacity is determined under Rule 3(3), Rule 5 springs into action. However in the instant case the change in parameter was admittedly made in April 1997 before the Capacity .....

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is with effect from 1.9.1997 when Rule 5 was already in operation and, therefore, irrespective of when the declaration/ parameters was made Rule 5, would be applicable. 6. We have considered the submissions from both the sides and perused the records. The appellant are a rolling mill and the period of dispute in the present case is from September 1997 to March 2000. By a Notification No. 32/97-CE (NT) dated 18.8.1997 issued under Section 3A(2) of the Central Excise Act, 1944, the Central Governm .....

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e pinions in the pinion stands in millimeter. Rule 3(1) provided that a hot rolling mill shall declare the value of d , n , i and Speed of rolling , the parameters referred to in sub Rule (3) to the Commissioner of Central Excise with a copy to Assistant Commissioner. Sub Rule (2) of Rule 3 provided that on receipt of the declaration regarding parameters received from the assessee, the Commissioner shall get the parameters verified for their correctness. Sub rule (3) of Rule 3 prescribes the for .....

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e 3(3) which was based on certain parameters d , n i and speed of Rolling to be declared to the Commissioner in terms of Rule 3(1). It is only by another notification issued under section 3A(2) that the Capacity Determination Rules, 1997, were amended by adding Rule 5 which provided that - If in case the annual capacity determined by the formula in sub Rule (3) of Rule 3 in respect of a mill is less than the actual production of the mill during the financial year 1996-1997, the annual capacity s .....

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ls (supra) considered the question as to whether sub Rule 4(2) of the Capacity Determination Rules is to be read with Rule 5 ibid, or in other words, when after initial determination of the capacity of production of an assessee on the basis of the parameters declared by him under Rule 3(1), the assessee changes the parameters resulting in lesser capacity of production, whether Rule 5 would be applicable and the Apex Court answered this question in affirmative holding that Rule 4(2) has to be rea .....

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