2006 (6) TMI 316

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....6-12-1998 to 31-5-2000 under Rule 96ZQ (3) of the Central Excise Rules, 1944. The Commissioner also ordered recovery of interest on duty in terms of Rule 96ZQ(5)(i) of the Rules. He also imposed penalty equal to duty under Rule 96ZQ(5)(ii) of the Rules. The above demand of duty is based on Annual Capacity of Production (ACP) determined by the Commissioner for the above period, wherein rail length of galleries was also included as part of total rail length of stenter. After noticing that the Hon'ble Supreme Court had held galleries to be excluded from the stenter dimension for the purpose of determination of ACP of independent textile processor, learned Commissioner revised the ACP of the appellants and raised fresh demand of duty against th....

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.... Annual Capacity Determination Rules, 1998. Rule 3 of the said rules laid down the method of determination of ACP of an independent textile processor, for the purpose of payment of duty under Rule 96ZQ read with Section 3A. One of the factors required to be considered in the context of determination of ACP was mentioned in clause (i), which reads as under:- (i)      The number of chamber (of a hot-air stenter), each of which having a rail length of up to 3.05 meter on each side, installed in such factory shall be construed as one chamber and any fraction exceeding such rail length of any such chamber shall be computed on a pro rata basis;" In both the appeals, this provision has been misconstrued by the appell....

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....tory response. The levy of interest on duty and the imposition of penalty are also sought to be challenged on the strength of the High Court's judgment. Here again, the appellants have no answer to our queries as to whether they paid appropriate duty in terms of Section 3 of the Act. The assessee cannot challenge the Commissioner's orders on mutually contradictory grounds. Hence we are unable to accept the present plea of learned Consultant, which is not figuring in the memoranda of appeals. It is claimed that the duty based on revised ACP was paid by the assessee, and this claim has not been successfully contested. The question now is whether the assessee is liable to pay interest on the amount of duty belatedly paid and whether they are l....