TaxTMI 
TaxTMI 
2017 (2) TMI 944
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....Seven crore thirty eight lakh fifty nine thousand three seventy two only) has not been found sustainable; and modvat credit of Rs. 23,60,11,667/- (Rs. Twenty three crore sixty lakh eleven thousand six hundred sixty seven only) was allowed under Rules 57A and 57Q of Central Excise Rules. 2. The Revenue has been represented by the Ld. AR, Sh. R.K. Majhi and the respondent namely Hira Steel Ltd. has been represented by the Ld. Sr. Advocate, Sh. Balbir Singh with the Advocate Sh. K.M. Menon. 3. Based on the appeal memorandum the Ld. AR for the Revenue inter alia submits as under: i. The entire issue depended on the fact, whether the Respondent No.1 were using pinion distance of 415 mm Rolling stand for manufacture of 6 mm dia rods or n....
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....nd that as per the Standard IS:1786 to grade FE, ribbing operation was recommended for the wire rods having its dia 8 mm to 32 mm for CTD Bars only. Thus, the adjudicating as grossly erred in holding the view that the Respondent No.1 would not come within the ambit of Section 3A of the Central Excise Act 1944 read with notification No.31/97 CE (NT) dated 01.08.1997, as amended, as the Respondent's rolling mill was having pinion stand with nominal center distance of more than 410 mm. 4. The Ld. Advocate for the respondent based on cross objections and written submissions inter alia submits as under: i. The Central Government introduced section 3A w.e.f. 14.5.1997 in the Central Excise Act, 1944. As per the said Section, certain iro....
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....are outside the purview of Compound Levy Scheme as they have mill size of above 411 mm. Based on the above understanding, the Respondent paid central excise duty on the goods manufactured and cleared by it in terms of Section 3 of the Act. v. In view of the cross examination, the Commissioner noted that the expert was not provided complete information and most importantly, the fact that the Respondent was also manufacturing CTD ribbed bars of 6 mm which cannot be manufactured by the machinery except the last Pinion stand of 415 mm. The Commissioner while adjudicating the issue in hand noted that mill size of 415 mm was even declared much before the issuance of second Notification which excluded rolling mills of above 411 mm from the purv....
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....ns, it has been noted that any repair on installation, non working etc. of the machinery is irrelevant for the purpose of determination of capacity as the duty is charged on capacity to produce and not on actual production. In the instant case, it is nobody's case that last Pinion stand of 415 mm was not present and available in the factory on the day of visit and it was even shown to the expert appointed by the department. viii. The Revenue even fails to note that Section 3A(4) also provide for payment of duty on actual production. This aspect was even Clarified by the Supreme Court in the case of Union of India vs. supreme Steels and general Mills, 2001 (133) ELT 513 (SC) 5. after careful consideration of the facts of the case, ....