TaxTMI 
TaxTMI 
2009 (1) TMI 287
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....e order dated 29th March, 1999, the annual production capacity has been fixed finally in terms of value, including gallery for stenter no. 1 as Rs. 885.324 lacs, for stenter no. 2 as Rs. 744.684 lacs, for stenter no. 3 as Rs. 744.684 lacs and for stenter no. 4 as Rs. 744.684 lacs with the monthly duty liability for stenter no. 1 as Rs. 9.443 lacs, for stenter no. 2 as Rs. 7.943 lacs, for stenter no. 3 as Rs. 7.943 lacs and for stenter no. 4 as Rs. 7.943 lacs. The above determination was made effective from 16th December, 1998. It appears that the appellant has not disputed the aforesaid fixation of annual production capacity and has accepted the order dated 29th March, 1999 inasmuch as no appeal against the said order was filed. However, the appellant has paid duty under protest. 3. It appears that the appellant had not paid excise duty from 16th February, 1998 to March, 1998 in accordance to the fixation of the annual production capacity as per order dated 29th March, 1999 within the specified time and could pay on 21st April, 1999, therefore, a show cause notice was issued by the Superintendent Central Excise, Range-V Division-I, Kanpur dated 23rd August, 1999 asking the appel....
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....d "Rules superseded by new Rules within one year and three months for making the position clear that modified Rules providing for excluding length of Galleries while determining annual capacity of production under "Hot Air Stenter" Independent Textile Processor Annual Capacity Determination Rules, 2000, Tribunal did not commit any error in relying upon the doctrine of conten poranea expositio to remove the ambiguity in understanding the language of the 1998 Rules". The Hon'bie Supreme Court has very categorically held that galleries were to be excluded while determining production capacity under "Hot Air Stenter Independent Textile Processor Annual Capacity Determination Rules, 1998 and thereafter duty so collected on galleries was without authority of law which becomes liable to be refunded to the appellant. 7. Being aggrieved by the order of the Commissioner (Appeals), Commissioner, Customs and Central Excise, Kanpur filed appeal before the Tribunal. The Tribunal by the impugned order allowed the appeal. The Tribunal allowed the appeal mainly on the ground that on the declaration being filed by the appellant for determination of annual capacity of hot air stenter, the Commissi....
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....side galleries was under protest. It was further submitted that the payment of duty in respect of side galleries was assured to be looked into, but has not so far been decided nor any final order for determination of annual production capacity and duty liability thereon has been passed. It is further stated that two orders issued by the Commissioner of Central Excise, Kanpur were not accompanied by any preamble as to enable the Company to seek redress and make representation are being interlocutory order and the amount paid under protest was pending decision. It was further submitted that by letter of protest filed on 22-4-1999 may kindly be taken up so as to determine whether any duty was outstanding on 31st March, 1999 for side galleries is pursuance to the technical expert verification and report of your good self as well in terms of Explanation -1 and on the basis of which final order is yet to follow. On these facts learned counsel for the appellant submitted that the aforesaid correspondence clearly shows that payment of duty on stenter galleries has always been disputed by the appellant and the duty was paid under protest and the appellant was seeking final order on the veri....
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....counsel for the parties, we have gone through the order of the Tribunal and the rival submissions. Section 3A of the Act reads as follows : "Section 3A. Power of Central Government to charge Excise duty on the basis of capacity of production in respect of notified goods - (1) Notwithstanding anything contained in Section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duly in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of the revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section. (2) Where a notification is issued under sub-section (1), the Central Government may, by rules, (a) provided the manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an officer not below the rank of Assistant Commissioner of Central Excise and such annual capacity shall be de....
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.... quantity of processed fabrics referred to in Rule 2, cleared from the factory in the preceding financial year; to the Commissioner of Central Excise (hereinafter referred to as the Commissioner), with a copy to the Assistant Commissioner of Central Excise. (2) on receipt of the declaration referred to in clause (1), the Commissioner shall take necessary action to verify its correctness and ascertain the correct value of each of the parameters given in such declaration. The Commissioner may, if he so desires, consult any technical authority for this purpose. (3) the annual capacity of production of processed textile fabrics specified in Rule 2 in respect of a factory of an independent processor shall be determined keeping in view the following factors, namely:- (i) the number of chambers (of a hot-air stenter), each of which having a rail length of upto 3.05 metres 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; (ii) the average value of the processed textile fabrics (per sq.m.) referred to in Rule 2 for such factory....
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....ral Excise, one month in advance of such proposed change, and shall obtain the written approval of the Commissioner before making such change, whereafter the Commissioner of Central Excise shall determine the date from which the change in the annual capacity shall be deemed to be effective. Explanation I.- For the purposes of this notification, a float drying machine or any other equipment of a length 3.05 metres installed in or attached to a stenter for aiding the process of heat setting or drying of the fabrics shall be deemed to be one chamber of a stenter and any fraction of such length shall be computed on a pro-rata basis. Explanation II.- Unless otherwise specified in any rule made under Section 3A of the Central Excise Act, 1944 (1 of 1944), for the purposes of this notification the goods shall be deemed to have been manufactured or produced with the aid of a hot-air stenter, if they are cleared from a factory where a hot-air stenter is installed, irrespective of whether it is in use or in working condition, or is otherwise. Explanation III.- For the purposes of these rules, an "independent processor" means a manufacturer who is engaged primarily in the processing ....
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....ed above cannot be calculated, the average value of such fabrics shall be as declared by the independent processor at the time of making the declaration, but the amount of duty payable on such fabrics shall be reworked out at the end of a financial year on the basis of actual average value of the textile fabrics produced in the financial year in such factory; (3) The Commissioner of Central Excise shall, as soon as may be, after determining the annual capacity of production and the average value of processed textile fabrics and the number of chambers (of a hot-air stenter) of the factory of the independent processor, by an order, intimate the same as also the rate of duty applicable to the independent processor : Provided that the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, may determine the annual capacity of production on a provisional basis pending verification of the declaration furnished by the independent processor and pass an order accordingly. Thereafter, the Commissioner may determine, the annual capacity, as soon as may be, and pass an order accordingly. (4) The capacity of production for any part of ....
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....t is clarified that the hot-air stenters installed in the factory, but which are permanently closed or sealed as on the 1st day of March, 2000 shall, subject to such safeguards, conditions and limitations as may be specified by the Commissioner of Central Excise in this regard, not be taken into account for the purposes of determination of the annual capacity of production of the independent processor." 14. The aforesaid Notifications came up for consideration before the Apex Court in the case of Commissioner of Central Excise, Jaipur-II v. M/s. SPBL Ltd., reported in JT 2002 (8) SC 244. The Apex Court held as follows : "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 ....
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....b-rule (3) of Rule 11 wherein it is laid down that where as a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer, may refund, the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act therefore, an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for refund which we may term it so is in the nature of execution of a decree/order. In the case at hand it was specifically mentioned in the order of the Assistant Controller that the assessee may file appeal against the order before the Collector (Appeals) if so advised." 15. Paragraph-99(iv), (v) and (vii) of the decision of the Apex Court in the case of Mafatlal Industries Ltd. v. Union of India (Supra) reads as follows : (iv) It is not open to any person to make a refund claim on the basis of a decision of a Court or Tribunal rendered in the case of another person. He cannot also claim that the decision of the Cou....
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....ctors, like induction furnaces, steel rerolled mills, etc., the evasion of excise duty on the goods was substantial and production was not disclosed accurately and calculation of excise duty on the basis of their production capacity was thought as appropriate. Under the scheme evolved in this provision the annual production capacity of the mills and the furnaces was to be determined by the Commissioner of Central Excise in terms of rule to be framed under Section 3A(2) of the Act by the Central Government. Thereafter, the assessee would be liable to pay duty based on such determination by the Commissioner. If the annual production capacity determined by the Commissioner is disputed by the assessee, the Commissioner was required to redetermine the same as provided in Section 3A(4) of the Act. 17. It appears that the appellant has opted under Rule 963Q for the payment of excise duty on the basis of annual production capacity to be determined by the Commissioner under Section 3A of the Act. Section 3A(4) of the Act required re-determination of the annual production capacity in case if the determination made by the Commissioner is being disputed. For the determination of annual prod....
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.... Apex Court and the provisions of law. -Sd- Justice Rajes Kumar 19. [Order per : Amitava Lala, J. (In concurrence)]. - We have fortified with two important judgments of the Supreme Court in re Flock (India) Pvt. Ltd. (Supra) and SPBL. Ltd. (Supra) which required detail discussion. In earlier judgment the Supreme Court held against the assessee when it had neither challenged the order by filing any appeal nor did it pay the duty under protest. Particularly when the Assistant Collector granted a liberty to the assessee by saying that it may file appeal against the order before the Collector (Appeals), if so advised, it did not think it prudent to proceed accordingly. Factual position therein cannot be equated with that of present case. In the present case the appellant has deposited the requisite amount claimed by the authority under protest admittedly. A further plea has been taken that no final order has been passed by the authority to prefer an appeal. Generally a party aggrieved did not choose to exercise the statutory right of filing an appeal, cannot be permitted to raise a question about correctness of the order of adjudicating authority subsequently by filin....