2004 (97) ECC 345 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

Eastern Bench -- Kolkata

Shri V.K. Jain, Member (T) and Shri M.P. Bohra, Member (J)

R.S. Industries

Versus

CCEx., Kol. II

AND

CROSS APPEAL

Appeals No. EDM-374/2003 & 380/2003

[Arising out of Order-in-Appeal No. 037/Kol.II/2003 dated 29.5.2003 passed by Commr. of Central Excise, Kol.-II.]

Order No. A-532-533/KOL/04, dtd. 6.8.2004, Certified on 17.8.2004

Appealable order

Order for fixation of annual capacity under Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 -- Not a speaking order -- As such not an appealable order.

[Para 12]

Annual Capacity of Production

Fixation of -- Jurisdiction -- Commissioner (A) has given an abatement and re-determined the annual capacity of production which is not within the power of but in the power of jurisdictional Commissioner -- Held, Directed the Commissioner to re-determine the annual capacity of appellants and the abetment for the relevant period after giving a reasonable opportunity of hearing to party by observing principle of natural justice.

[Para 12]

PRESENT :

Shri B.N. Chattopadhyay, Consultant for R.S. Industries.

Shri T.K. Kar, SDR for CCE, Kol. II.

Cases Cited :

1. Bharat Agrico v. CCE., Jamshedpur, 2003 (54) RLT 687 (CEGAT-Kol).............. [Para 10]

2. S. Kumar Nationwide Home Road Lines v. Commr. of Central Excise, Indore, 2003 (160) ELT 1019 (Tri.-Del.)................................................................................................................. [Para 10]

Per : Shri V.K. Jain

These two appeals have been filed against the Order-in-Appeal No. 037/Kol.II/2003 dated 29.5.2003 passed by Commissioner of Central Excise (Appeals), Kol.II. Out of two appeals, one is filed by M/s R.S. Industries and the other is filed by the Revenue. They are being disposed of by a common order.

2. Brief facts of the case are that M/s R.S. Industries are engaged in the manufacture of non-alloy steel rods and bars falling under Chapter 72 of the CETA, 1985. With effect from 1.9.97, compounded levy system of duty was introduced in terms of the provisions of Section 3A of the Central Excise Act, 1944 read with Rule 96ZP of the Central Excise Rules, 1944. The Commissioner of Central Excise, Kol.II, had fixed the annual capacity of production of their rolling mill at 2620.856 MTs and monthly payment of duty was fixed at Rs. 65,521. The above determination of duty was for the period from September 1997 to November 1997. From December, 1997 to March, 1998, the determination was made at 1361.740 MTs and the liability was fixed at Rs. 17,022 at monthly liability.

3. The Central Excise Officers visited the factory on 3rd April, 1998 for verification of the different parameters of their rolling mills. According to the verification found by the Central Excise Officer and accepted by the appellant, the production capacity was 917.67 MTs. The appellants in their letter dated 12.5.98 submitted revised parameters to the Commissioner for the year 1998-99, according to which the annual production capacity came to 917.677 MTs and the amount of duty of Rs. 11,471 per month. However, the Commissioner had fixed the annual capacity of production at 1361.740 MTs and the monthly liability of Rs. 17,022. It was communicated by the Additional Commissioner in his letter dated 6.5.98. According to the appellants, there was a mistake in determining of capacity of their mill. The determination was made on the higher side and they requested the Commissioner to rectify the same.

4. Several show-cause notices were issued by the Revenue against the appellants confirming demand of duty of Rs. 2,03,5,00 by the Deputy Commissioner of Central Excise on the appellants. He also imposed an equal amount of penalty. He also confirmed the demand of Rs. 18,352 under Section 96ZP (3), of Central Excise Rules.

5. Being aggrieved by the above order passed by the Deputy Commissioner of Central Excise, the appellants filed an appeal before the Commissioner (Appeals) of Central Excise, Kolkata. The Commissioner (Appeal II) of Central Excise, Kolkata, in his Order-in-Appeal, made the following orders:

(a) Duty Payable for November, 1997 is Rs. 26,659

(b) Duty payable from April, 1999 to June, 1999 is Rs. 34,413

(c) Penalty of Rs. 61,072 is payable.

6. Being aggrieved by the Order-in-Appeal passed by the Commissioner, the appellant had filed this appeal before the Tribunal.

Hence the present appeal.

7. The appellants have submitted that they have filed this appeal on the ground that the penalty under Rule 96ZP (3) is the maximum penalty. The penalty may be lesser. The imposition of penalty is wholly depended on the discretion of the adjudicating authority. Thus, they have requested in their appeal for lesser penalty amount.

8. On the other hand, the Revenue has aggrieved by the order of the Commissioner (Appeals) on the ground that the Commissioner (Appeals) has allowed the abatement for the period from 19.11.97 to 28.11.97. The statutory authority to allow the abatement is only the Commissioner who has not allowed any abatement. The Revenue has submitted that the Commissioner (Appeals) has exceeded his jurisdiction by passing such an abatement order. The other ground of the Revenue is that the Commissioner (Appeals) over-rode the order of the Commissioner, Kolkata II Commissionerate and refix the duty liability and thus re-determined the amount of duty to be paid by the assessee though he had not authority to do so. It is only the jurisdictional Commissioner is empowered to pass such an order of re-fixation.

9. We have heard Shri B.N. Chattopadhyay, Ld. Consultant for the appellants and Shri T.K. Kar, Ld. SDR for the Revenue in Appeal No. EDM-374/03. We have also heard Shri T.K. Kar, Ld. SDR for the Appellant-Revenue and Shri B.N. Chattopadhyay, Ld. Consultant for the respondents in Appeal No. EDM-380/03.

10. We find that M/s R.S. Industries in their letter dated 11.9.98 informed the department that in the determination of their rolling mill capacity, there was a mistake. According to the verification report of the Central Excise Officers, it was 917.677 MTs but the determination was made on the higher side. They had requested the Commissioner to rectify the defect. The above request of the appellants had not been considered by the Commissioner and no appealable order was passed on this request. Ld. Consultant, Shri Chattopadhyay, has submitted that their fixation of annual capacity was communicated by the Additional Commissioner under his letter C.No. IV(16) 149-CE/PRO/CAL.II/97 dated "Nil". He also submits that the Commissioner had also not given them an opportunity to represent their case and has not passed any appealable order. Their representation against the said order has not been replied till date by the Revenue. Ld. Consultant has submitted that as held by the Tribunal in the case of M/s S. Kumar Nationwide Home Road Lines v. Commr. of Central Excise, Indore, 2003 (160) ELT 1019 (Tri.-Del.) that the order is not passed in the adjudication proceedings and, therefore, not appealable. He also submits that the penalty for late payment of duty is not warranted as held by the Tribunal in the case of Bharat Agrico v. CCE., Jamshedpur, 2003 (54) RLT 687 (CEGAT-Kol).

11. Ld. SDR, Shri T.K. Kar, reiterates the ground of appeals filed by the Revenue.

12. After hearing from both sides, we find that the order for fixation of annual capacity under Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997, is not an speaking order and as such it is not an appealable order as held by the Tribunal in the cases referred to above. The basis of the Revenue is that the Commissioner (Appeals) has given an abatement and re-determined the annual capacity of production which is not within the power but in the power of jurisdictional Commissioner. We direct the Commissioner to re-determine the annual capacity of the appellants and the abatement for the period from 19.11.97 to 28.11.97 after giving a reasonable opportunity of hearing to the party by observing principle of natural justice.

13. Both the appeals are disposed of in the above terms.

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