2001 (10) TMI 102 - HC - Central Excise

Tribunal rules against Commissioner in capacity determination case under HRSMACD Rules

The Tribunal ruled in favor of the respondent in a case concerning the determination of annual production capacity under HRSMACD Rules. The Commissioner's ... Production capacity based duty Issues involved: Determination of annual production capacity u/s 35H(1) of the Central Excise Act, 1944 and interpretation of HRSMACD Rules.Summary:The Commissioner of Central Excise filed a petition u/s 35H(1) of the Central Excise Act, 1944, raising questions regarding the determination of annual production capacity under HRSMACD Rules. Respondent, engaged in manufacturing hot rolled products, had their annual capacity initially fixed at 11961.135 Metric Tons for 1996-97, which was later reduced to 7328.435 Metric Tons after changing parameters as per Rule 4(2) of the HRSMACD Rules. However, the Commissioner re-fixed the capacity back to the original amount. The Tribunal, on appeal, found that invoking Rule 5 for re-determination was incorrect and ruled in favor of the respondent.The petitioner argued that Rule 5 deems the fixed capacity for 1996-97 as actual production for subsequent years, but the Court disagreed. It was acknowledged that the capacity was reduced due to parameter changes, leading to lower production. Invoking Rule 5 in such a scenario would be unjust as it would result in charging excise duty for non-existent capacity. The Court also noted a similar case, Awadh Alloys (P) Ltd. v. CCE, where the Revenue's claim was rejected by the Tribunal.Despite the Revenue's attempt to challenge the Awadh Alloys case, the information was not provided to the Court, raising concerns of selective filing. Ultimately, the Court found no legal question arising from the Tribunal's order and dismissed the petition.