2001 (4) TMI 614 - AT - Central Excise

Appeal allowed, duty demand set aside under Rule 96-ZQ. Gallery exclusion in stenter capacity upheld.

The appeal was allowed, and the impugned order upholding duty demand under Rule 96-ZQ of Central Excise Rules was set aside. The matter was remanded for ... Production capacity based duty Issues:1. Appeal against order-in-appeal upholding duty demand under Rule 96-ZQ of Central Excise Rules.2. Challenge regarding computation of production capacity of stenter.3. Interpretation of law regarding consideration of galleries in determining annual capacity of stenters.4. Impact of High Court order on the matter.Analysis:1. The appeal was filed against the order-in-appeal upholding the duty demand of Rs. 6,61,031 under Rule 96-ZQ of the Central Excise Rules. The appellants challenged the impugned order dated 26-12-2000 passed by the Commissioner (Appeals) which confirmed the duty demand as per the order-in-original of the Joint Commissioner dated 21-1-2000.2. The appellants contended that their views were not considered in computing the production capacity of the stenter. They relied on the Tribunal's decision in Sangam Processors Bhilwara Ltd. v CCE, Jaipur and Swastic Suitings and Ors. v. CCE, Jaipur. However, the SDR argued that since the order determining the annual capacity was not challenged, the subsequent impugned order could not be disputed.3. The Tribunal, citing Sangam Processors Bhilwara Ltd. case, held that galleries cannot be considered while determining the annual capacity of stenters as they do not aid the process of heat setting or drying of fabrics. The Commissioner's order, which included galleries in determining capacity, was deemed contrary to the law laid down in the Sangam Processors case.4. The High Court order directed the matter to be sent back to the Commissioner for redetermining the annual capacity of the stenter in accordance with the court's directions. Consequently, the impugned order of the Commissioner (Appeals) was set aside, and the matter was remanded for a fresh decision, aligning with the Tribunal's legal interpretation and the High Court's directive. The appeal was allowed by way of remand, and any duty amount deposited by the appellants was not to be refunded until the matter was finally decided.