Jalan Dyeing & Bleaching Mills vs Commissioner Of Central Excise, ...

(Arising out of Orders-in-Original No. 14/M-I/04 dated 18.10.2004, 15/MI/2004 dated 30/12/2004 passed by Commissioner of Central Excise, Mumbai-I, Order-in-Appeal no. BR/109/M-IV/2005 dated14.07.2005 passed by Commissioner of Central Excise (Appeals), Mumbai-IV)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical)

======================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

====================================================== Jalan Dyeing & Bleaching Mills Appellant Vs. Commissioner of Central Excise, Mumbai-I Respondent

Appearance: Shri Gajendra Jain, Advocate, for Appellant Shri Ashutosh Nath, Additional Commissioner (AR), for Respondent

CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing : 20/10/2015 Date of Decision : 20/10/2015

ORDER NO

Per: M.V. Ravindran

All these three appeals are filed by the appellant against Orders-in-Original No. 14/M-I/04 dated 18-10-2004, 15/MI/2004 dated 30/12/2004 and order-in-appeal no. BR/109/M-IV/2005 dated 14.07.2005.

2. Heard both sides and perused the records.

3. The issue involved in all these appeals is regarding the fixing of the annual production capacity as per rule 96ZQ of the Central Excise Act 1944, as provided under section 3A of the Central Excise Act 1944. The Commissioner of Central Excise and the adjudicating authority have fixed the annual production capacity as per the provisions of rule 96ZQ and rules of head fair central independent taxability processor annual capacity denomination rule 1998, (rules 1998). Based upon last determination of annual production capacity by the commissioner of Central Excise, consequent demands of duty were raised with interest thereof and penalties were also imposed.

4. It is the claim of the counsel for the appellant, the issue is no more res-integra, as in their own case the tribunal by final order no. A/639/13 dated 16.04.2013, have set aside earlier order of the Commissioner of Central Excise for fixing of annual production capacity under the rules of 1998, by following the judgment of the Honble High Court of Madras in case of Beuty Dyers 2004 (166) ELT 27 (Mad).

5. Learned departmental representative reiterates the findings of the lower authority.

6. On perusal of the records and consideration of submissions made by both sides, we find that the issue involved is regarding the annual production capacity based on the rules, 1998. We find that the lower authorities were in error in fixing such production capacity and consequently demanding the duty of as the rules, 1998 enacted as per provisions of rule 96ZQ, which were struck by the Honble High Court of Madras in the case of Beuty Dyers (Supra). We find that this bench by final order dated 16.04.2013, in appellants own case held as under. 3. Accordingly, Commissioner vide impugned order dated 31.5.2004 redetermined the capacity/monthly duty liability. In this order, Commissioner dropped the monthly duty liability due to galleries but continued to includ duty liability due to cylinders.

4. Ld. Counsels main contention was that Madras High Court has already declared that Hot Air Stenter Indepentent Textile Processor Annual Capacity Determination Rules, 1988 as ultravires of erstwhile Section 3A of the Central Excise Act, 1944 and in view of this position, the impugned order is required to be set aside. Ld. Counsel also states that Commissioner had not factually examined whether cylinders were attached to stenter. In support of his contention, Ld. Counsel quoted the following case laws.

[i] Beauty Dyers Vs. UOI 2004 (166) ELT 27 (Mad.) [ii] CCE Vs. Valson Dyeing Bleaching & Printing Works 2010 (259) ELT 33 (Bom.) [iii] Karnataka Ginning & Pressing Factory Vs. CCE 2008 (231) ELT 257 (Tri.-Mum.) [iv] AAR Kay Processors Vs. CCE 2009 (246) ELT 376 ( Tri.Del.) [v] Raji Thangam Textiles Ltd. Vs. CCE 2006 (205) ELT 631 (Tri.-Chennai) [vi] Sangam Processors Bhilwara Ltd. Vs. CCE 2001 (127) ELT 679 (Tri.-LB) [vii] CCE Vs. S.P.B.L. Ltd.

2002 (146) ELT 254 (SC)

On enquiry from the bench whether appellant has paid duty as determined as per Section 3, Ld. Counsel stated that the appellant has paid duty more than what is leviable under that Section.

5. Ld. Additional Commissioner (A.R.) reiterates the impugned order.

6. We note that Honble Madras High Court in the case of Beauty Dyers Vs. U.O.I. reported in 2004 (166) ELT 27 (Mad.) has observed :

13. As rightly submitted by learned Counsel all chambers irrespective of the nature, age and their capacity cannot be treated equally for the purpose of fixing the annual capacity of production, as the same has been done under Notification No. 42/1998. The rules framed under Notification No. 42/1998 is not having acceptable method to arrive at the capacity of production, which is absolutely necessary to levy and collect duty of excise under Section 3A of the Act. So, the said rules cannot be adopted for determination of excise duty as they cannot level the correct capacity of production of the factory for the purpose of levying excise duty. So, the Rule 3 of the rules issued in the Notification No. 42/1998 cannot be sustained as they are ultra vires Section 3A of the Act.

14. The order rules issued under other Notifications which are impugned in the other writ petitions are only based on the rules issued in Notificaiton No.42/1998 and so the reasoning given above will apply to these rules also. So they also cannot be sustained consequently, they are set aside. But the petitioners are liable to pay duty of excise under Section3 of the Act or under any other provisions contemplated for the same.

7. Since the issue involve in this case is the same as in the final order dated 16.04.2013, following the same, we set aside the impugned order and allow the appeals with consequential relief, if any.

8. The appeals are allowed.

(Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

akp 1 2 APPEAL No. E/274, 930, 2736/05-Mum