COMMISSIONER OF CENTRAL EXCISE JAIPUR II Vs. SPBL LIMITED
SUPREME COURT OF INDIA
COMMISSIONER OF CENTRAL EXCISE,JAIPUR
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(1.)The issue involved in this batch of appeals is - whether galleries attached to the chambers of a hot air stenter are deemed to be one chamber of a hot air stenter. The full bench of the customs, excise and gold (control) appellate tribunal, New Delhi (hereinafter referred to as "tribunal") by judgment and order dated 4.1.2001 in appeal no. E/1892/2000-NB held that a float drying machine and any other equipment if attached would be deemed to be a chamber of stenter. But such equipment installed in or attached to a stenter should be for aiding the process of heat setting or drying of the fabrics. That judgment is challenged in these appeals.
(2.)Before appreciating the contentions raised by the learned counsel for the parties, we would refer to the relevant part of section 3a of the Central Excise Act, 1944 (hereinafter referred to as "the Act") as under:-
"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 duty 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 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 subsection (1) , the central government may, by rules,- (a) provide 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 deemed to be the annual production of such goods by such factory ; or. . . . . "
(3.)In exercise of the powers conferred by sub-section (2) of section 3a, the central government framed the "hot Air Stenter Independent textile Processors Annual Capacity determination Rules, 1998 (hereinafter referred to as the "1998 Rules") , which came into effect from 10th December, 1998. Rule 2 of the said rules inter alia provided that the rules shall apply for determining annual capacity of production of an independent processor if such textile fabrics are manufactured or produced with the aid of a hot-air stenter. Rule 3 provides for method of determination of annual capacity of production by considering the factors mentioned therein. Rule 3 provides as under:-
1. An independent processor shall declare:- (i) the number of hot-air stenters installed in his factory; (ii). . . (iii) the number and size (both the length and width in centimetres) of chambers in each of the hot-air stenters; (iv) to (vii). . . . (2). . . . . . (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 metre 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-rate basis; (ii) to (iv). . . . . "
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