2006 (3) TMI 577 - AT - Central Excise

Tribunal directs Commissioner to re-fix production capacity in appealable form for Textile Processor

The Tribunal held in favor of the appellant, an Independent Textile Processor, stating that the Commissioner's final order fixing the annual capacity of ... Annual capacity of production - Production capacity based duty Issues Involved:Challenge to the final order of annual capacity of production by the Commissioner without filing an appeal.Detailed Analysis:The appellant, an Independent Textile Processor, contested the inclusion of the length of galleries in determining the number of chambers for fixing the annual capacity of production. The Commissioner's final order dated 14-7-99 fixed the number of chambers at 10.71 chambers, including the gallery length. The appellant's representation against this decision was not responded to. Subsequently, show cause notices were issued for differential duties based on the final fixation. The Additional Commissioner dropped the demands, citing a Supreme Court decision that the length of the gallery should not be considered in determining the number of chambers.The Revenue filed an appeal, arguing that the Additional Commissioner had no authority to re-fix the annual capacity of production without challenging the Commissioner's final order. The Revenue contended that since the appellant did not challenge the final order, they were obligated to comply with it. The appellate authority agreed with the Revenue's contention, stating that as the final order was not appealed or set aside, the appellant must follow it.The appellant's main grievance was that the final order was not in an appealable form but was merely a letter informing them of the annual capacity of production. They had filed a representation against it, which remained unanswered. The appellant argued that the Commissioner's decision to set aside the original adjudicating authority's order was unjustified.The Tribunal agreed with the appellant, noting that the final order lacked directions for challenging it before a higher appellate forum. The appellant was not given an opportunity to be heard before the decision was made. The Tribunal directed the Commissioner to address the appellant's representation, re-fix the annual capacity of production, and issue orders in an appealable form. The show cause notice would be adjudicated after the capacity was re-fixed. The appeal was disposed of accordingly, and the stay petition was also resolved.