- (1.) The Customs, Excise and Service Tax Appellate Tribunal, West Block No. 2, R.K. Puram, New Delhi (hereinafter referred to as "the Tribunal") has referred the following question, for opinion to this court, under section 35H of the Central Excise Act, 1944 (herein after referred to as the Act): Whether considering the facts after the Commissioner had determined the annual capacity of production, the Commissioner could review his order when he was informed that Deepak Gupta had issued fake certificates and as such the earlier determination was based on false and fabricated invoice/certificates regarding the annual capacity of production? The facts giving rise to this reference are that M/s. Govind Mills Ltd. (the respondent) was engaged in the business of manufacture of non-alloy steel ingots, by installing induction furnaces, falling under Chapter sub-heading 7207.90, of the Central Excise Tariff Act, 1985. The respondent opted for payment of Central excise duty, under the compounded levy scheme, as per rule 96ZO(3) of the Central Excise Rules, 1944, through it's letter dated September 1, 1997. The annual capacity of production of the induction furnaces of the respondent was determined provisionally then finally according to the provisions of the Induction Furnaces Annual Capacity Determination Rules, 1997. On his application, the annual capacity of production (ACP) and monthly duty liability (MDL) was provisionally determined, the ACP as 25,779.200 M.T. and MDL as Rs. 13,42,667 and communicated to the respondent, vide the letter dated September 30, 1997.
(2.) The respondent, through his letter dated October 16, 1997, filed an objection against the provisional determination, on which a team of the officers and technical expert physically measured the various parameters of induction furnaces of the respondent on February 13, 1998 and submitted its report. On the basis of this report, the Department by letter dated March 20, 1998 determined the ACP as 26,912.960 M.T. and MDL as Rs. 14,01,717 with effect from September 1, 1997. The respondent again filed an objection dated March 26, 1998 against the aforesaid determination and requested for determination of ACP and MDL according to the capacity shown in the invoices and certificates of the manufacturer of the crucibles. The Commissioner of Central Excise, Allahabad, vide the order dated April 1, 1998, relying upon the invoices and certificates finally determined the ACP and MDL as Rs. 11,75,833 with effect from September 1, 1997 and assessed excise duty on it.
(3.) Subsequently, an investigation was made by the excise officer against M/s. Steadfast Engineers, the manufacturer of crucibles of the respondent. During investigation, statement of Deepak Gupta, a partner of M/s. Steadfast Engineers, was recorded by the excise officer on August 20, 1998, in which he had stated that invoices issued to the respondent did not show the correct annual capacity of production and were issued without any knowledge that it would be used for Central excise purposes and had he known that the invoices would be used for Central excise purposes then he would not had issued the invoices. On the basis of the statement of Deepak Gupta, the excise officer submitted a report to the Commissioner of Central excise, Allahabad that the respondent had secured the assessment on the basis of the forged papers. The Commissioner of Central Excise, Allahabad reopened the proceedings against the respondent and issued a show-cause notice dated November 17, 1998 for revoking the order dated April 1, 1998 and fresh determination of the ACP and MDL and recovery of differential short-duty along with interest and penalty, on the ground that final determination dated April 1, 1998 was obtained by producing forged and fabricated documents. Simultaneous notice has also been issued to Deepak Gupta.;