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of <h1>Galleries attached to hot-air stenter machines not 'chambers' for excise capacity u/rr 3(1), 3(3), Explanation-I; appeal dismissed</h1> Whether galleries attached to chambers of a hot-air stenter constitute a 'chamber' for excise duty capacity assessment under Rules 3(1), 3(3) and ... Power of Central Government to charge Excise duty on the basis of capacity of production in respect of notified goods - Scope of Rules 3(1), 3(3) and Explanation-I to Rule 5 - Whether galleries attached to the chambers of a hot air stenter are deemed to be one chamber of a hot air stenter? Held that:- Admittedly, within a short span of one year and three months, Rules framed in 1998 were superseded by similar Rules which came into force from 1st March, 2000 making the position clear. It is also to be stated that before framing the said Rules, doubts were raised by various Commissionerates as to whether that the galleries should or should not be included in term 'any other equipment installed in or attached to a stenter'. The Tribunal arrived at a conclusion that the Explanation to Rule 5 makes it clear that a float drying machine or any other equipments mentioned therein must be for aiding the process of heat setting or drying of fabrics. The Tribunal observed that a float drying machine is aiding the process of heat setting or drying of fabrics and other equipments contemplated by Explanation-I should also have like utility. This part of the reasoning of the Tribunal cannot be said to be illegal or erroneous because the Explanation itself specifies that other equipment attached to a stenter should also be for aiding the process of heat setting or drying of the fabrics. The Tribunal found that a gallery, which is having no fan or radiator attached to it, cannot come within the purview of interpretation as contemplated by Explanation-I. Further, on the basis of the aforesaid amended Rules, the Tribunal negatived the contention raised by the Department that while counting number of chambers in each of the hot-air stenters, the galleries attached to it would be deemed to be one chamber of a stenter. Amended Rules clarify and remove the ambiguity particularly which arose because of the Trade Notice. Appeal dismissed. Issues: Whether galleries attached to the chambers of a hot-air stenter are to be deemed to be one chamber of a hot-air stenter for the purpose of determining annual capacity under the Hot Air Stenter Independent Textile Processors Rules.Analysis: The determinative legal framework comprises Section 3A of the Central Excise Act, 1944 and the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules (1998 and 2000), specifically Rule 3(1), Rule 3(3) and Explanation-I to Rule 5. Explanation-I in the 1998 Rules treated a float drying machine or any other equipment of length 3.05 metres installed in or attached to a stenter for aiding heat setting or drying as one chamber; the 2000 Rules amended Explanation-I to expressly exclude galleries from being so treated. The rules and the contemporaneous Trade Notice addressed ambiguity about whether galleries, which provide heat insulation but lack active drying components, fell within the phrase 'any other equipment installed in or attached to a stenter for aiding the process of heat setting or drying.' Applying the Explanation-I text and contemporanea expositio, galleries lacking fans or radiators do not satisfy the requirement of aiding the heat-setting or drying process and thus are not to be counted as chambers. The short statutory life of Section 3A and the supersession of the 1998 Rules by the 2000 Rules do not preclude reliance on contemporaneous exposition to resolve the ambiguity.Conclusion: Galleries attached to a stenter are not to be deemed one chamber of a hot-air stenter for capacity determination because they do not constitute equipment installed or attached for aiding the process of heat setting or drying of fabrics; the appeals and SLPs are dismissed.Ratio Decidendi: Where a deeming or explanatory provision in subordinate rules specifies that only equipment installed in or attached to a stenter for aiding heat-setting or drying qualifies as a chamber, closed galleries that merely provide insulation and lack operative drying components are excluded from being counted as chambers.
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