Ruma Pal, J. - (1.) Leave granted.
(2.) The appellant has two mills in which it manufactures hot rolled steel products. With effect from 1st September 1997, the Government of India notified ingots and billets under Section 3-A of the Central Excise Act, 1944 for levy of excise duty on the basis of the annual capacity of production, (ACP) of the factory. To give effect to the scheme, Rules were framed for determination of the annual capacity of production of a factory producing such notified goods known as the Induction Furnace Annual Capacity Determination Rules 1977. By the Rules, the ACP of a factory was taken to be a fixed multiple of the total capacity of the furnaces installed in the factory. The manner of levy and collection of duty was governed by Rule 96(ZP) of the Central Excise Rules, 1944 also issued under Section 3A of the Act. Circular dated 26th February 1998 had been issued by way of a clarification in answer to questions raised in connection with the operation of the Rules. One of the questions so raised was: "How would the annual capacity of production be determined if a unit has more than one rolling mill in the same premises but operates only one rolling mill at a time." In answer to this, it was clarified that: "If a unit has one re-heating furnace with two rolling mills, then the capacity of the higher of the two mills should be taken as the assessed annual capacity for the unit. However, if each rolling mill has a reheating furnace, the capacity of the unit would be the sum total of the capacity of each rolling mill in the unit".
(3.) Prior to 1st September 1999, the appellant had one heating furnace and the appellants ACP was fixed on that basis. The appellant then installed a second furnace but, according to the appellant, there was only one electric motor which meant that the both furnaces could not be operated simultaneously. The appellant notified the change to the Commissioner under Rule 4 of the Rules. According to the appellant, the approval was communicated to the appellant by the Commissioners letter dated 25th August 1999 after which the appellant filed a revised declaration on 1st September 1999. Response was given to this on 17th October 2000 by the Commissioners office which sought to club the capacity of both the rolling mills since the second heating furnace had been installed on the basis of the circular dated 26th February 1998. The appellants submission that the circular did not have any application to the appellants case because both the furnaces could not be operated simultaneously was rejected by the Commissioner who then proceeded to fix the ACP by clubbing the capacity of both the rolling mills. An appeal was preferred by the appellant to the Customs Excise and Gold Control Appellate Tribunal (CEGAT) which rejected the appellants appeal and affirmed the Commissioners order. The appellant filed a Reference Petition under Section 35-H (I) of the Act as well as a writ petition contending that the respondents were not justified in determining the ACP of the appellant by taking the capacity of both the mills together. The High Court dismissed the Reference Application and the Writ Petition holding that no question of law arose from the order of the Tribunal. It was also found that the CEGAT had considered all aspects of the matter and had correctly determined the question raised.;