The Tribunal, vide order dated 6th April, 2000, allowed the appeal and held that Rule 5 of the 1997 Rules cannot be applied in view of change in technical parameters of the rolling mill.
Thereafter, the Commissioner may determine the annual capacity, as soon as may be, and pass an order accordingly.
On 5th January, 1998 the Commissioner, Central Excise, Chandigarh determined the annual capacity of production of the respondent at 7683.753 MT, as per the formula laid down in sub section 3 of Rule 3 of 1997 Rules.
Provided that the Commissioner may determine the annual capacity of the hot re rolling unit on provisional basis pending verification of the declaration furnished by the hot re rolling mills and pass an order accordingly.
The rate and the manner of payment of Excise duty under Section 3A of the Act was also indicated in the numberification.
The respondent assessee is engaged in the manufacture of hot re rolled steel products of number alloy steel in a hot steel rolling mill, classifiable under Chapter 72 of the Central Excise Tariff Act, 1944, for the purpose of levy of Excise duty etc.
However, keeping in view Rule 5, the annual capacity was finally fixed at 11961.135 MT on the basis of actual production of the mill during the financial year 1996 97.
Vide letter dated 13th September, 1999, the respondent requested the Commissioner for re determination of annual production capacity of their unit in terms of Rule 4 2 of the 1997 Rules on the ground that they have changed some of the parameters of their mill.
Vide order dated 17th October, 2001, the High Court rejected the reference petition holding that numberquestion of law arose from the order of the Tribunal.
Aggrieved by the said order of the Commissioner, the respondent filed an appeal before the Tribunal.
Thereafter the Commissioner of Central Excise shall determine the date from which the change in the installed capacity shall be deemed to be effective.
The Commissioner may, if so desires, companysult any technical authority for this purpose 3 the annual capacity of production of hot re rolled products of number alloy steel in respect of such factory shall be deemed to be as determined by applying the following formula Annual Capacity 1.885 x 10 4 x d x n x i x e x w x Number of utilised hours in metric tonnes Where d Nominal diameter of the finishing mill in millimetres n Nominal revolutions per minute RPM of the drive i Reduction ratio of the gear box w Weight in Kilogramme per metre of the re rolled product.
Subsequently, another Notification No.32/97 CE NT was issued on 1st August, 1997 making the said Rules effective from the even date.
The request was acceded to and vide order dated 27th January 2000, the Commissioner, applying the formula as laid down under Rule 3 3 , determined the annual capacity of the mill at 7328.435 MT but relying on Rule 5, he again companyputed the annual capacity at 11961.135 MT, being equal to the actual production of the mill during the financial year 1996 97.
However, by Notification No.
Subsequently, the parameters were altered.
45/97 CE NT dated 30th August, 1997, 1997 Rules were amended with effect from 1st September, 1997.
For the sake of ready reference, Rules 3 and 4, in so far as they are relevant for these appeals, are extracted below The annual capacity of production referred to in rule 2 shall be determined in the following manner, namely 1 a hot re rolling mill shall declare the values of d n I and speed of rolling, the parameters referred to in sub rule 3 , to the Commissioner of Central Excise hereinafter referred to as the Commissioner with a companyy to the Assistant Commissioner of Central Excise 2 on receipt of the information referred to in sub rule 1 , the Commissioner shall take necessary action to verify their companyrectness and ascertain the companyrect value of each of the parameters.
The Rules prescribed the formulae for determination of the annual capacity of production of a hot re rolling mill, on the basis of the information to be furnished by the mill to the Commissioner of Central Excise on the parameters referred to in Rule 3 3 of the 1997 Rules.
By reason of the said amendment, apart from substituting a fresh sub rule 3 of Rule 3, prescribing a new formulae to determine the annual capacity of production, number very relevant for the purpose of the present appeals, Rule 5 was inserted after sub rule 2 of Rule 4, which reads as follows In case, the annual capacity determined by the formula in sub rule 3 of rule 3 in respect of a mill, is less than the actual production of the mill during the financial year 1996 97, then the annual capacity so determined shall be deemed to be equal to the actual production of the mill during the financial year 1996 97.
Dissatisfied with the said order, the Commissioner made an application to the High Court under Section 35H of the Act, seeking a direction to the Tribunal to refer the question of law, which according to him, arose from the order of the Tribunal.
23/97 CE NT dated 25th July, 1997, the Central Government framed and numberified Hot Re rolling Steel Mills Annual Capacity Determination Rules, 1997 for short the 1997 Rules , to be effective from 1st August, 1997, for determination of annual capacity of production of a factory producing re rolled products as companytained in the said numberification.
K. JAIN, J. Leave granted in SLP C Nos.
