2000 (7) TMI 320 - AT - Central Excise

CEGAT Upholds Commissioner's Textile Capacity Decision, Deems Galleries as Equipment

The Appellate Tribunal CEGAT, Delhi upheld the Commissioner's order regarding annual production capacity of textile processors. The Tribunal deemed ... Construction of the expression 'equipment' in Explanation I to the Capacity Determination Rules - inclusion of galleries of a Hot Air Stenter in annual capacity of production - application of Tribunal precedent in identical factual matrix - balance of convenience in grant or refusal of interim relief - requirement of interim deposit as condition for stayConstruction of the expression 'equipment' in Explanation I to the Capacity Determination Rules - inclusion of galleries of a Hot Air Stenter in annual capacity of production - application of Tribunal precedent in identical factual matrix - Galleries attached to a Hot Air Stenter are to be treated as 'equipment' under Explanation I and may be taken into account for fixation of annual capacity under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. - HELD THAT: - The Tribunal accepted the Commissioner's approach of counting the galleries at each end of the stenter chambers when determining annual capacity because the galleries facilitate prevention of heat loss and thereby aid the process of heat setting and drying. The appellate forum relied on its earlier Final Order in C.M. Prints (P) Ltd. & Others v. C.C.E., Delhi, which held that the term 'equipment' in Explanation I is to be read in a general sense and is not confined to a narrow mechanical interpretation; it can include facilities such as galleries that assist the process. On that basis, the gallery is within the ambit of 'equipment' aiding heat-setting and may properly be included in computation of capacity.The galleries are included as 'equipment' under Explanation I and may be taken into account for fixation of annual capacity.Balance of convenience in grant or refusal of interim relief - requirement of interim deposit as condition for stay - The appellants' application for stay of the Commissioner's Order was refused subject to payment of the full amount sought to be stayed as an interim deposit within a stipulated period. - HELD THAT: - Applying the balance of convenience and having regard to the Tribunal's earlier ruling in a similar case, the bench found that the balance favoured the Revenue. No financial hardship was pleaded by the appellants. Consequently, the court directed deposit of the entire amount the appellants sought to have stayed as a condition for not granting the interim relief, and directed a return date for reporting compliance.Stay refused; appellants directed to deposit the entire claimed amount within eight weeks and to report compliance on the stated date.Final Conclusion: The Tribunal upheld inclusion of the stenter galleries as 'equipment' for capacity fixation under Explanation I of the Capacity Determination Rules, applied its earlier decision in C.M. Prints (P) Ltd., and refused interim stay unless the appellants deposited the full amount claimed to be stayed within eight weeks, with compliance to be reported on the directed date. The Appellate Tribunal CEGAT, Delhi upheld the Commissioner's order fixing the annual production capacity of independent textile processors. The Tribunal ruled that galleries in the Hot Air Stenter are considered equipment under the Capacity Determination Rules, rejecting the appellant's argument. The appellants were directed to deposit Rs. 5,67,168 within eight weeks.