Judgment:
1. The application for condonation of delay of 39 days in preferring the above appeal against the order of the Commissioner which was received by the applicants on 17.12.2000 is explained as being due to the bonafide belief on the part of the applicants that the order of the Commissioner required to be rectified and therefore, they applied to the Commissioner itself for correction of the alleged error and it is only just prior to the intimation received from the Commissioner that the remedy was to file an appeal before the Tribunal that they filed the appeal.
2. On hearing both sides and noting the submissions, we can done the delay and allow the application.
3. For the purpose of hearing of the appeal which we do with the consent of both the sides, we dispense with the pre-deposit and stay the recovery thereof and then proceed to dispose of the appeal itself.
We find that in this case the appellants had an existing rolling mill.
The annual capacity of product was determined under Hot-Rolling Steel Mills Annual Capacity Determination Rules, 1997 and the duty liability was fixed as Rs. 14,257 per month. On 17.12.98, they intimated to the Commissioner their installation of standby pinion stand (hereinafter referred to as 'Rolling Mills No. 2) in addition to the rolling mill No. 1 and sought approval for its installation. The capacity of the rolling mill No. 2 was also the same as that of rolling mill No. 1 viz.
1140.529 M.T. They started rolling mill No. 2 with effect from 18.1.99.
Show cause notices were issued ranging from July 1999 to April 2000 proposing recovery of duty calculated for standby pinion (rolling mill No. 2). The appellants replied to the notices stating that they had not installed additional rolling mill but installed an additional pinion stand without reheating furnace. However, they drew the attention of the adjudicating authority to the TRU's circular dated 26th Feb. 1999 clarifying that if a unit has one heating furnace with two rolling mills, then the capacity of higher of the two mills should be taken as assessed capacity of the unit. The Commissioner passed the impugned order confirming the duty demand of Rs. 2,13,855/- holding that despite the claim made for having paid the differential duty as demanded in the show cause notices, no evidence to that effect has been produced before him. Hence, this appeal.
4. We find that Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997 provides for redetermination in case the manufacturer proposes to make any change in the installed machine. We also find that TRU circular dated February, 1998 states that the capacity of the higher of the two mills should be taken as the assessed capacity of the unit having one heating furnace with two rolling mills.
It appears to us that the Commissioner has proceeded to decide the issue without considering the relevant rules and the circular mentioned above and has proceeded on the basis of an admission of duty liability by the assessee. However, we find that the assessees have not admitted the duty liability of the amounts raised in the notice but appeared to have stated that having discharged the duty liability in respect of one rolling mill, they were not required to pay anything further since the capacity of rolling mill No. 2 was the same as the capacity of rolling mill No. 1. In the interest of justice, the Commissioner is required to look into the relevant rules as well as the circular cited by the appellants to decide the matter afresh after granting personal hearing to the assessees. We, therefore, set aside the impugned order and remand the case back to the Commissioner. The appeal is thus allowed by way of remand.