2022 (1) TMI 905

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....ase are that the appellant is a processor of textile fabrics. Processed textile fabrics was specified under Notification No. 41/1998-CE N.T. dated 10th December 1998 as notified goods on which there shall be levy of duty of excise in accordance with provisions of Section 3A of Central Excise Act, 1944. From 16th December 1998 on the notified goods, the appellant discharged duty in terms of Rule 96ZQ of Central Excise Rules, 1944 read with Hot Air Stenter Independent Textile Processors Annual Capacity Determination (HASITPACD) Rules, 1998. Later on the annual capacity was determined vide order dated 29th June 1999 and number of chambers were worked out as 23.23 including rail gallery length. Duty was worked out at Rs. 1,50,000/- per chamber ....

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....jurisdictional officer has also accepted that length of chamber as 6231 instead of 6536 and length of rail gallery is not to be added while counting number of chambers as held by the Hon'ble apex Court in the case of Commissioner of Central Excise, Jaipur - II v. Sangam Processors Bhilwara Ltd [2002 (146) ELT 254 (SC)]. Therefore, length of rail gallery has to be excluded. He further submitted that in the impugned order, instead of considering the submissions made by the appellant while re-determining the annual capacity, the adjudicating authority has held that appellant has not challenged the order of determination of annual capacity of production, therefore, the same is final and they are required to pay duty accordingly. In this context....

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....the appellant has not challenged the order of determination of annual production capacity. The said issue has attained finality as held by the Hon'ble High Court of Gujarat in the case of Premraj Dyeing & Printing Mills Pvt Ltd (supra) and of the Hon'ble High Court of Bombay in Om Textile Pvt Ltd (supra) that there is no requirement to challenge the order of determination of annual production capacity and the assessee is at liberty to challenge the demand of duty as demanded in the show cause notice on the basis of such determination of annual production capacity. Further, we find that in the case of Shree Bhagwati Steel Rolling Mills (supra) the Hon'ble apex Court has declared the Rules ultra vires and therefore interest and penalty cannot....