Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1944-Section 3A-lnduction Furnace Annual Capacity Determination Rules 1944-Rule 96(ZP) Central Excise Act 1997-Rules 3 and 4-Circular dated 26-2- 1998-Central Excise Rules |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Excise: Central Excise Act, 1944-Section 3A-lnduction Furnace Annual Capacity Determination Rules, 1997-Rules 3 and 4-Circular dated 26-2- 1998-Central Excise Rules, 1944-Rule 96(ZP)-Hot rolled steel products-Levy of duty on the basis of Annual Capacity of Production (ACP)-Assessee having two rolling mills, each mill with a separate heating furnace-Commissioner relying upon the 1998 Circular determining the ACP by clubbing the capacity of both the mills-Correctness of-Held: Correct-The 1998 Circular clearly says that the capacity of the higher of the two mills would be taken for assessing the ACP only if each rolling mill did not have a separate heating furnace-If each rolling mill had a separate heating furnace, then the capacity of the unit would be the sum total of the capacity of each rolling mill in the unit irrespective of the fact that only one mill operated at a time. With effect from 1st September 1997, steel ingots and billets were notified under Section 3-A of the Central Excise Act, 1944 for levy of excise duty on the basis of Annual Capacity of Production (ACP) of the factory producing such goods. For determination of the ACP, the Induction Furnace Annual Capacity Determination Rules, 1997 were framed. In answer to a query raised as to how would the ACP be determined if a unit has more than one rolling mill in the same premises but operates only one rolling mill at a time, it was clarified by Circular dated 26th February 1998 issued by the Board that if a unit has one re-heating furnace with two rolling mills, then the higher capacity 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. Appellant has two mills in which it manufactures hot rolled steel products. Prior to 1st September 1999, it had one heating furnace and its ACP was fixed on "that basis. The appellant subsequently installed a second furnace but, according to the appellant, there was only one electric motor which meant that both the furnaces could not be operated simultaneously. Pursuant to the said change, the Commissioner on the basis of the 1998 Circular determined the ACP of Appellant by clubbing the capacity of both the rolling mills. Appeal against the Commissioner's order being dismissed by CEGAT, Appellant filed Reference Petition under Section 35-H (I) of the Act as wet! as a writ petition before High Court, which were dismissed. In appeal before this Court the appellant contended that the formula for determination of the ACP was on the basis of one motor per unit; that therefore despite having two furnaces since there was only one motor which was common to both, in terms of the said Circular the capacity of the higher of the mills should have been taken as the ACP. Respondents however contended that the question of taking the higher capacity of the two mills would only arise if there was one re-heating furnace. |
Judge | Hon'ble Ms. Justice Ruma Pal |
Neutral Citation | 2005 INSC 185 |
Petitioner | M/s Channy Enterprises |
Respondent | Commissioner Of Central Excise, Chandigarh |
SCR | [2005] 3 S.C.R. 251 |
Judgement Date | 2005-04-05 |
Case Number | 2415 |
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