Judgment:
1. This appeal has been preferred by the appellants against the impugned order-in-original of the Commissioner dated 8-2-2001 vide which he had determined their annual capacity of production (in short ACP) for the period 1-9-99 to 31-3-2000 under Rule 3(3) of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997.
2. The appellants were engaged in the manufacture of hot re-rolled products of non-alloy steel which were chargeable to duty in terms of Section 3A of the Central Excise Act, upto 31-3-2000. They opted for payment of duty on the basis of the annual production capacity in terms of Sub-rule (3) of Rule 96 ZP of the Rules. After introduction of the compounded levy scheme under Section 3A of the Act, they filed declaration for determination of ACP of their unit, as required under Rule 3(1) of the Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997. They also filed certificate of Chartered Engineer's certificate regarding correctness of their declaration wherein they claimed that their re-heating furnace is Pusher type. On the basis of the verification report submitted by the A.C., the Commissioner vide order dated 11-12-97 determined ACP of their unit under Rule 5 of the said Capacity Determination Rules. Thereafter, vide letter dated 24-12-97 they requested for installation of the additional rolling stand, with 'd' parameter as 255 mm. and the permission was accordingly granted to them. They then filed revised declaration on 1-4-98. The ACP of their unit was re-determined accordingly with effect from 1-4-98 by the Commissioner. Again, they vide letter dated 21-5-99 requested for permission to change the parameter and that permission was also granted to them and they filed revised declaration on 1-9-99.
They were accordingly issued show cause notice dated 17-10-2000 for re-determination of the ACP of their unit by taking into consideration the total capacity of both their mills. The appellants contested that notice. They, however, did not deny that they had installed two Rolling Mills and two reheating furnaces w.e.f. 1-9-99. but averred that they have one common Electric Motor of 750 KW and only one common Flywheel and as such, they were not running both the mills at a time simultaneously, but only in shifts. The Commissioner, however, did not agree with their version and taking into account the Board's clarification vide letter dated 26-2-98 determined the ACP of their both the mills accordingly through the impugned order.
3. The learned Counsel has contended that the appellants were not running both the mills simultaneously as they had only one common Electric Motor and Flywheel with which both the mills could not run simultaneously. The ACP of their unit could not be determined as sum total of the production capacity of both the rolling mills in terms of Board's clarification dated 26-2-98. Therefore, the impugned order deserves to be set aside.
4. On the other hand, the SDR has reiterated the correctness of the impugned order.
6. The installation of two rolling mills and two re-heating furnaces infact had not been disputed by the appellants before the adjudicating authority i.e. Commissioner. They, in their reply to the show cause notice, admitted this fact and this admission was again repeated by them in their letter dated 21-5-99 wherein they alleged that after change in the parameter, they will be having rolling mills of size 230 mm. and 255 mm. Their plea that on account of having common Flywheel and Electric Motor and two pusher type furnaces, they were not in a position to run both the mills simultaneously, but only one at a time, had been rightly rejected by the Commissioner. The appellants themselves admitted that they were having two rolling mills and two reheating furnaces. Therefore, their ACP was to be determined keeping in view the Board's clarification letter dated 26-2-99, No.345/40/97-TRU vide which it was clarified as under :- "If a unit has one re-heating furnace with two rolling mills, then the capacity of the higher of the two mills should be taken as the assessed annual capacity for the unit. However, if each rolling mill has a re-heating furnace the capacity of the unit would be the sum total of the capacity of each rolling mill in the unit".
The Commissioner has rightly by following the above said clarification of the Board, determined the ACP of the appellants for the disputed period 1-9-99 to 31-3-2000. His impugned order does not suffer from any legal infirmity so as to call for any interference.
7. In view of the discussions made above, the impugned order of the Commissioner is upheld. The appeal of the appellants is ordered to be dismissed being without merit.