Customs, Excise and Gold Tribunal - Hyderabad
Balaji Steel Rolling Mills Pvt. Ltd. And ... vs Cce on 25 February, 1999
Equivalent citations: 1999(83)ECR598(TRI.-HYDERABAD)
ORDER V.K. Ashtana, Member (T)
1. These are three appeals against three independent Orders-in-Original as follows:
____________________________________________________________________ Sl. Appeal No. Order-in-Original No. Passed by Party's Name No. COMMISSIONER OF CENTRAL EXCISE ____________________________________________________________________
1. E/3665/98 C. Ex. 32/198 dated 30.10.1998, M/s. Balaji Steel Rol-
Hyderabad-III ling Mills Pvt. Ltd.
2. E/3666/98 C. Ex. 31/98 dated 30.10.1998, M/s. Balaji Steel
Hyderabad-III Rolling Industries
3. E/3667/98 C. No. IV/16/114/97-Cx. (PF) M/s. Kar Steels Ltd.
dated 16.7.1998, Hyderabad-I
____________________________________________________________________ Since the issue involved is a common one, the three appeals were heard together and are being disposed of by this common order.
2. Briefly, the issue concerns determination of a simple fact as to whether the re-heating furnace in the factory premises of these three appellants is a "Batch Type" or "Pusher Type" Furnace, because under Section 3A and the notification issued thereunder the duty payable on annual production capacity basis for the two types of furnaces has been prescribed differently. The appellants contend that theirs is batch type furnace, whereas, it is the contention of revenue that the furnace are pusher type. Various certificate from Chartered Engineers have been submitted by appellants lo bolster their submissions. On revenue's side, a Superintendent of Central Excise Shri Sunder Rao Gude, who has an engineering academic qualification, was detailed by the Commissionerate to carry out physical inspection of the furnace in the presence of the appellant's repres-entative. On the basis of his report, revenue contends that the furnace is a pusher type. In the case of Order-in-Original C. No. IV/16/114/97-Cx. (PF) dated 16.7.1998 (M/s. Kar Steels Ltd.) the learned Commissioner has also relied on a report of a team of experts from National Institute of Secondary Steel Technology (NISST), Mandi Gobindgarh, who had visited that appellant's unit and examined the furnace therein and had certified that the furnace was pusher type only.
3. Heard Shri Gowri Shankar Sanghi, learned Advocate representing all the three appellants. Learned Advocate submits that the appellants rely on three evidences in the appeal:
(a) A certificate from the Chartered Engineer viz., M/s. TECCONS & Co. represented by one Shri R. Rajagopal, Chartered Engineer.
(b) A technical opinion dated 12.4.1998 of National Institute of Secondary Steel Technology addressed to the Hony. General Secretary, All India Steel Rerollers Association, Mandi Gobindgarh issued by one Shri S.I. Singh, Jt. Director SR. (T) as to what would constitute a pusher furnace and
(c) An extract of a technical treatise which distinguishes between batch type and continuous type re-heating furnace.
4. Learned Advocate submits that in Appeal Nos. E/3665 and 3666/98 though it is mentioned in the Orders-in-Original impugned that a copy of the verification report of the said Superintendent of Central Excise Shri Gude was given to the present appellants, in fact no such report was given to them and they are not in a position, therefore, to supply a copy thereof before this Tribunal. He further submits that since the two Orders-in-Original noted above heavily rely on the contents of this verification report to reach the conclusion that the furnace are pusher type, therefore, such a conclusion has been reached behind their back and is violative of the principles of natural justice. He further submits that as against this the certificate of a technical expert like the Chartered Engineer has not been considered and has been brushed aside.
5. With respect to the Order-in-Original dated 16.7.1998 (M/s. Kar Steels Ltd.), learned Advocate in addition also submits that no copy of the report of team of experts from National Institute of Secondary Steel Technology, Mandi Gobindgarh, who had visited the appellants factory and which has been totally relied upon by the learned Commissioner, has not been given to them at the time of original proceedings and, therefore, the decision contained in this Order-in-Original impugned has also been taken behind their back in violation of principles of natural justice.
6. Heard Shri R. Victor Thyagaraj, learned SDR, who submits that there is no violation of principles of natural justice involved in this case for the following reasons:
a) The Superintendent of Central Excise was technically qualified to make this verification, having an engineering background.
b) The verification made by him was in the presence of each of these appellants.
c) A gist of his conclusions are contained in the Orders-in-Original which clearly state that the furnace had a pusher type screw arrangement for feeding in the material to be re-heated. Learned SDR further submits because there is a pusher type arrangement for feeding the material to be re-heated, it ceases to be a manual batch type furnace per se.
d) In the case of Appeal No. E/3667/98, it is on record that when the team of experts from the National Institute of Secondary Steel Technology, Mandi Gobindgarh was examining the appellant's furnace, the Managing Director of the appellant company was present on the spot and, therefore, he was aware of the opinion of the expert team.
e) The verifications were as a result of the directions of the Hon'ble High Court of Andhra Pradesh as recorded in the Order-in-Original and, therefore, the details of this verification must have been sup-plied to the appellants.
7. We have carefully considered the rival submissions as well as the records of the case. At the very outset the Bench questioned the learned Advocate as to the source of the technical literature mentioned at para 3 sub para (c) above. Learned Advocate fairly concedes that this was extracted and photocopies from some technical treatise, but at this stage they are not in a position to identify the source of the same. To the best of his knowledge he submits that this could be given to them by the Central Excise department.
8. In Appeal Nos. E/3665 and 3666/98 after a perusal of the Chartered Engineer's certificate contained in the records, learned Advocate fairly concedes to the observation of this Bench that the certificate is not a completely speaking one inasmuch as that there is no description of the furnace as it exists but only the principles enunciated have been applied and a conclusion recorded.
9. Amongst the documents available on record is a technical opinion by the National Institute of Secondary Steel Technology, Mandi Gobindgarh dated 21.4.1998. A perusal thereof shows that this institute which is established by the Ministry of Steel, Government of India distinguishes the pusher type of furnace from the batch type of furnace in the fcllowing terms:
A furnace where the material is charged by a pusher mechanism and there is a movement of material inside the furnace, the material may be taken out either mechanically or manually, such furnace may be treated as Pusher Furnace.
This technical opinion is also on par with the unnamed extract mentioned above regarding the difference between batch and continuous furnace. A plain reading of the above shows that a pusher type of furnace shall have two distinguishing characteristics:
(i) That there is a pusher mechanism by which the material is charged into the furnace; and
(ii) There is a movement of the material inside the furnace while the furnace is heating the same.
We have no reason to dispute these two characteristics as being characteristic of a pusher type of furnace as this is the opinion of a recognised and reputable institute of technology instituted by the Government of India. Therefore, applying these two tests to the facts of the case as are available in these three Orders-in-Original, we observe as follows:
i) In the case of Orders-in-Original Nos. 31/98 dated 30.10.1998 and 32/98 dated 30.10.1998 the learned Commissioner has relied on the verification report of the expert Superintendent and though the report is not available on record but the gist thereof has been recorded in the said orders. A perusal thereof shows that the recorded fact which led the learned Commissioner to the conclusion that the furnace is a pusher type furnace was that in both these cases the furnace had a pusher type screw arrangement for feeding in the material into the furnace. However, both these orders are totally silent on whether the facts support the second test as is noted above i.e. whether these arrangement continues to allow movement of the material to be heated either intermittently or continually inside the furnace while the heating process is on. There is nothing on record before us to show that this fact has been considered and put on record in these cases. Since this is a material fact, absence thereof on the records of this case is now posing a great infirmity for this Bench to take any decision on the merits of the case.
ii) With respect to the Order-in-Original C. No. IV/16/114/97-Cx. (PF) dated 16.7.1998, we find that apart from a similar verification by the Superintendent and consideration of the existance of the pusher type arrangement for feeding material the learned Commissioner had also relied on the opinion of an expert team from the same institute as noted above. However, a copy of their technical report is not available on record as it is not enclosed with the Order-in-Original. Learned Advocate has also submitted that the appellant was not given the copy thereof on any stage of the proceedings.
10. At this stage, the learned SDR submits that time may be granted to pro-duce the same before the Tribunal.
11. In view of the aforesaid analysis we are compelled to conclude our findings as follows:
a) There is insufficient evidence of fact on the detailed construction and operational methodology with regard to the three furnaces in these three appeals on record and, therefore, this Bench is not in a position to apply the two tests noted above in these cases.
b) While the Order-in-Original No. 31/98 and 32/98 have recorded that the Superintendent of Central Excise's verification report copy was given to the appellants, learned Advocate on the other hand submits before us that this was not so. In any case, a copy of the report is not available (to) us for detailed consideration and to establish facts verified by the said officer particularly with respect to the second test i.e. whether the material moves inside the furnace during the heating.
c) With respect to the Order-in-Original C. No. IV/16/114/97-Cx. (PF) dated 16.7.1998 the technical report of the team of experts mentioned therein of the aforesaid institute is also not available before this Bench.
12. In view of these deficiencies of evidence and as the Tribunal is the last fact finding authority under the appellate scheme of things under the Central Excise Act, it is necessary that these facts are established correctly on record by the original authority. In view of this the matter needs to be remanded back to the original authority with the following directions:
(i) The copy of verification report of the Superintendent of Central Excise relied upon in the Orders-in-Original shall be supplied to the noticees.
(ii) If any other technical opinion is relied upon by the department, copies thereof shall also be supplied to the noticees.
(iii) Thereafter, the noticees shall be given effective opportunity to be heard and
(iv) If the noticees wish to place any further technical evidence with respect to construction and operation of the furnace installed in their units, the same shall be entertained and considered.
Thereafter, a speaking order shall be passed by the original authorities and while doing so the two tests noted above shall be applied to the set of facts which may emerge from his findings.
13. In view of the aforesaid analysis and findings, the stay applications have been considered and waiver and stay granted and thereafter, in consideration of the main appeals themselves the Orders-in-Original impugned before us are set aside and the matter remanded for de novo consideration to the original authorities as per the directions recorded above.
14. Since the matter involves a recurring effect of duty liability on both sides, therefore, it is in the interest of justice that these de novo proceedings shall be held as expeditiously as possible.
(Pronounced and Dictated in Open Court).