2002 (9) TMI 524 - AT - Central Excise

Tribunal favors appellant on production capacity calculation, directs use of specified factor

The Tribunal found the appellant's evidence regarding the 'd' factor more credible than the Departmental reports, directing the Commissioner to use 254 mm ... Production capacity based duty - Annual capacity of production Issues Involved:1. Determination of the 'd' factor for annual capacity of production.2. Validity of the reports prepared by the Central Excise Officers.3. Denial of cross-examination request by the appellant.4. Evaluation of evidence provided by the appellant versus the Departmental reports.Detailed Analysis:1. Determination of the 'd' Factor for Annual Capacity of Production:The core dispute revolves around the 'd' factor, which represents the pinion center distance in the formula for determining the annual capacity of production for hot re-rolling mills. The Commissioner of Central Excise determined the 'd' factor as 275 mm, leading to an annual capacity of 16123.536 MT. However, the appellant contended that the 'd' factor should be 254 mm, as certified by the manufacturer of the pinion stand.2. Validity of the Reports Prepared by the Central Excise Officers:The appellant challenged the accuracy and methodology of the reports by the Central Excise Officers, arguing that:- The officers used ordinary tape/scale instead of precise instruments like Micro Metres or Vernier Calipers.- The reports lacked details on the measurement techniques, instruments used, and qualifications of the person measuring.- The reports did not mention the model of the Pinion Stand or the manufacturer's specifications.- There were inconsistencies, such as referring to two upper and two lower pinions, while the appellant's mill had only three pinions.3. Denial of Cross-Examination Request by the Appellant:The appellant's request to cross-examine the visiting officers and the so-called expert was denied by the Commissioner, which the appellant argued was a violation of the principles of natural justice. The appellant cited several legal precedents to support the necessity of cross-examination to establish the credibility of the reports.4. Evaluation of Evidence Provided by the Appellant versus the Departmental Reports:The appellant presented various documents from 1996, including offers, orders, invoices, and certificates from the manufacturer, all indicating the 'd' factor as 254 mm. These documents predated the introduction of the scheme for levy of duty based on production capacity, suggesting no motive for misrepresentation. The Tribunal found these documents credible and noted that the Commissioner did not dispute their genuineness. In contrast, the Tribunal found the Departmental reports lacking in detail and method, and thus unreliable.Conclusion:The Tribunal weighed the evidentiary value of the appellant's documents against the Departmental reports and found the former more reliable. The Tribunal directed the Commissioner to determine the annual production capacity using the 'd' factor of 254 mm. The Tribunal noted that re-verification was not possible as the mill had been dismantled, thus resolving the dispute based on the available evidence.Final Judgment:The appeal was disposed of with a directive to the Commissioner to adopt the 'd' factor as 254 mm for determining the annual production capacity.