Customs, Excise and Gold Tribunal - Delhi
Hans Castings Pvt. Ltd. vs Cce on 22 February, 2000
Equivalent citations: 2000(69)ECC512
ORDER G.R. Sharma, Member (T)
1. These two appeals have been filed by the appellants. In these two appeals the issues are different. In one appeal, the issues are about closure of the furnace and thus requiring change in Annual Production Capacity. In the second appeal the issue is about abatement of duty for closure of the unit for more than 7 days.
2. In the first case the facts are that Annual Production Capacity of the furnace of the appellant was fixed on the basis of the furnace installed and operated from 1.9.97. There were three furnaces of the appellant which were in operation on 1.9.97. The Commissioner fixed the Annual Production Capacity of the unit taking the production of the three furnaces together. The appellants dismantled one furnace and requested for change of the capacity w.e.f. 1.10.97. The Commissioner considered the request of the appellant and re fixed their capacity based on the parameters of two furnaces effective from 1.10.97. The appellants then requested for another change in the number of furnaces stating that because of the power shortage, they would like to close one furnace and submitted that they have closed both furnaces w.e.f. 27.5.98 because of disconnection of electricity. However, after some time when electricity again became available they wrote to the Department that they will be working with one furnace w.e.f. 14.6.98. The Commissioner did not take cognizance of the closure of the two furnaces and restarting of one furnace when electric connection was restored to the appellants partly.
3. On this aspect Shri R. Santhanam, Ld. Counsel submits that detailed representation were sent to the Commissioner but the Ld. Commissioner did not consider their representation and held that the Annual Production Capacity determined for two furnaces shall apply for one furnace which had started functioning w.e.f. 14.6.98. He submits that this position is not acceptable as for some time no furnace worked and only one furnace worked after 14.6.98. He submits that thus there has been a great injustice to the appellants. He submits that since only one furnace worked w.e.f. 14.6.98, the capacity of one furnace should be taken for computing the duty after ascertaining the Annual Production Capacity of one furnace. Ld. Counsel submits that there should be no difficulty in ascertaining the Annual Production Capacity of this furnace as this furnace was already in existence and Annual Production Capacity of the furnace, was fixed at 8,000 tonnes vide the order of the Commissioner dated 19.3.88. He, therefore, prays that the impugned order may be set aside and the appeal may be allowed.
4. Shri Mewa Singh, Ld. DR reiterates the findings of the Ld. Commissioner.
5. We have heard the rival submissions. On this issue, we find that only one furnace was working from 14.6.98 for which an intimation was sent to the authorities. We note that it is a question of change in capacity and the change in capacity because of change in furnaces will be effective after one month from the date of intimation. Admittedly in this case the date of intimation was 14.6.98 and therefore, the revised Annual Production Capacity shall be applicable only w.e.f. 14.7.98.
6. On the second appeal, we find that abatement has been denied on three occasions as under:
1. From 27.5.98 to 13.6.98
2. 18.6.98 to 4.8.98 and
3. 13.10.98 to 19.10.98
7. Arguing the case, Shri R. Santhanam, Ld. Counsel submits that intimation of the closure of the units for the period 27.5.98 was submitted on 28.5.98 and on the date of reopening, intimation was sent on 14.6.98. He submits similarly for the closure of the furnaces w.e.f. 18.6.98, intimation was sent on 18.6.98 and intimation about opening of the factory was sent on 5.8.98. He submits that intimation for closure of the factory from 13.10.98 to 19.10.98 was sent on 14.10.98 and reopening of the factory was intimated to the Department on 20.10.98. He submits that their request for abatement has been rejected on the ground that mandatory requirements were not complied with by the assessee. Ld. Counsel submits that intimation was sent in writing to the Range Supdt. indicating the meter reading which is the requirement of Rule 96ZO(2). He submits that meters are electronic and reading at the time of reopening could not be furnished as there was no power supply. He submits that since the meters are electronic, therefore, it is not possible to take any reading unless the metre is connected and power runs through it. He submits that Ld. Commissioner has not applied his mind to their contention and has passed the orders without examining the various requirements. He, therefore, prays that the appeal may be allowed.
8. Shri Mewa Singh, Ld. DR submits that the requirement of the law is that intimation of closure should be given either a day prior or on the day of closure. He submits that in the first case the factory is reported to be closed on 27.5.98 whereas intimation thereof was sent on 28.5.98, therefore, closure, if any, shall be deemed only from 28.5.98. Ld. SDR submits that in the third case the closure is intimated to be of 7 days. Counting the days in the normal course will be in the third case only six days and therefore, the third case closure i.e. closure from 13.10.98 to 19.10.98 does not qualify for abatement.
9. We have heard the rival submissions. We have also perused the evidence on record and the requirement of the rule. We note that in the first case i.e. closure from 27.5.98 to 13.6.98, intimation was sent on 28.6.98. Intimation is required to be sent either one day prior or on the date of closure. Therefore, in the first case the closure shall be deemed to be from 28.5.98 and abatement will be admissible only for the period from 28.5 98 to 13.6.98. In respect of the second claim of abatement for the period 18.6.98 to 4.8 98, we find that the claim will be admissible as it satisfies the requirements of the rule. Insofar as abatement for the period from 13.10 98 to 19.10.98 is concerned, we note that in counting the numbers, this does not qualify for abatement.
10. These two appeals are disposed of in the above terms.