COMMISSIONER OF CENTRAL EXCISE Vs. SHREEJI CONCAST LTD

JUDGEMENT

(1.) THE Appellant -Revenue has proposed following three questions :

(2.) THE respondent -assessee is engaged in manufacture of MS Ingots of non -alloy steel in induction furnace plants. For this purpose the respondent -assessee had installed furnace purchased under invoice bearing No. III/IN/0375 dated 31 -1 -1993 which inter alia projected the capacity of the furnace installed by the assessee at 5 MTs. On the basis of Notification No. 24/97 -C.E. (N.T.) dated 25 -7 -1997 induction furnace capacity of Production Determination Rules, 1997 (the Rules) were brought into effect with effect from 1 -8 -1997. The respondent assessee vide declaration dated 20 -8 -1997 opted to avail of the scheme in Rule 3 of the aforesaid Rules. The Appellant authority fixed the annual capacity of production provisionally on the basis of such invoice. Subsequently vide declaration dated 22 -10 -1997 the respondent assessee declared that the furnace installed had deteriorated and the capacity was reduced to 4MTs. In support of the claim certificate dated 21 -10 -1997 issued by the Chartered Engineer was produced. The said claim was not accepted by the Commissioner. The matter was carried in Appeal before Customs Excise and Service Tax Appellate Tribunal (the Tribunal) who vide order dated 28 -9 -2001 remanded the matter to the Commissioner for correct determination. In the second round the same position obtained and the Tribunal vide order dated 24 -4 -2007 came to the conclusion that reasonings adopted by the Commissioner in denying the claim were not correct.

(3.) HEARD the learned Counsel for the Appellant. It is submitted that in light of Rule 3(1) of the Rules once the capacity of the furnace was taken as per invoice there was no question of changing the same as sought for by the assessee. That Rule 4 of the Rules on which reliance has been placed does not permit such an exercise once the Commissioner had fixed the capacity of the furnace and for the purpose of making such a change at least one month in advance, of such proposed change, the assessee is required to obtain written approval of the Commissioner before making such change. That in the present case the assessee had in fact initially opted to have the determination made under Rule 3(1) of the Rules and could not have thereafter changed within a short span of two months to opt for fixation under Rule 3(2) of the Rules. In these circumstances, the Tribunal had committed an error in law in reading Rule 3(1) of the Rules and hence, a substantial question of law arose out of the impugned order of the Tribunal.