Daksh Steels Pvt. Ltd. Vs. Cce

Daksh Steels Pvt. Ltd. vs Cce

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Oct 16, 2003

~4 min read

https://sooperkanoon.com/case/32703

For advocates & juniors · 7-day free trial

Brief this judgment before chambers

Stop skimming 50 pages - get an 18-section AI Brief on this case, ask scoped follow-ups, and find related precedents with Semantic Search. Full trial, no card required.

18-section brief - facts, issues, ratio, relief
Ask this case - answers cite the judgment
Semantic search - find precedents by meaning
Research drawer - sections, cites, related cases

Citation: sooperkanoon.com/32703
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: K Usha, N T C.N.B.
Decided On: Oct 16, 2003
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Daksh Steels Pvt. Ltd.

Respondent

Cce

Legal References

Reported In: (2004)(112)LC349Tri(Delhi)

Excerpt

.....vasan 5. the above invoice is not an invoice for a furnace of a particular capacity. the capacity of the existing furnace was being altered so as to reduce it from 4 m.t. to 3 m.t. in such a case, verification authorities of the capacity by the central excise cannot be faulted.since, upon verification, the capacity was found to be reduced only to be 3.59 mt, the authority was justified in fixing annual capacity of production based on that furnace capacity. we are not able to agree with the appellant's counsel that the verification carried out amounts to levying duty based on actual production. in the present case, a furnace of a particular capacity has not been bought and installed.instead, the existing capacity was being altered by a job work.therefore, there was no machine capacity certified by machine manufacturer. therefore, verification has to be treated as quite in order. the questions of demand of duty on actual production would arise only if the authorities had ascertained the quantum of goods manufactured during the relevant period and then demanded duty on that quantity. that has not taken place. instead, the capacity of the furnace has been determined by a proper method of valuation and annual production capacity has been determined based on the furnace capacity.such an action is entirely in terms of the rules. we find no reason to interfere with the same. the appeal fails and is rejected.

Full Judgment

1. The appellants are manufacturers of mild steel ingots etc. They discharged their Central Excise duty liability under the Compounded Levy Scheme (Section 3A of the Central Excise Act). This Scheme levies duty based on the capacity of production. The impugned order has determined the capacity of the furnace of the appellant as 3.5 M.T. and annual capacity at 11488 M.T. while the appellant had declared the capacity of the furnace at 3 M.T.2. The contention in the present appeal is that the authority should have gone by the declaration of the assessee that the furnace capacity was 3 M.Ts. It has been pointed out that the original capacity of 4 M.T. has been reduced to 3 M.T. and this position remains confirmed by invoice No. 507 dated 11.2.1999 of Industofur Engineers INC. During the hearing of the appeal, learned Counsel for the appellant emphasized that in terms of the Departmental instructions the authorities have to go by the capacity as indicated in the invoice for the machinery and they are not to take up separate determination of the capacity. He has emphasized that a determination of the capacity would tantamount to assessing actual production and not discharging of duty based on the capacity of production.

3. As against this, the learned SDR has submitted that, in the present case, sale and purchase of furnace is not involved. The original furnace was of 4 M.T. capacity. The appellants had claimed that the capacity had been reduced to 3 M.Ts and in support of that claim produced the aforesaid invoice of Industofur Engineers. However, verification had shown that the reduced capacity was to 3.59 M.Ts.

Learned SDR also pointed out that the invoice-dated 11.2.1999 cannot be taken as an invoice involving the sale of the furnace. Instead it was an invoice for a job work for reduction of coil size from 4 M.T. to 3 M.T. capacity. The learned SDR has contended that such a job work invoice cannot be taken as an invoice indicating the sale of a furnace of a particular capacity.

4. We have perused the records and considered the rival submissions.

The job work invoice in question is reproduced below: 1' 8 & 72) 85C 20, DDA Shed Okhla Industrieal Area, Phear I, New Delhi- 110 020 JOB WORK ONLYM/s. Daksha Steels Pvt. Ltd. Invoice No.: 507C-48-51 U. P. S. I. D. C. PH IIORAI (Distt Jalaun) U.P. Date: 11.2.1999 Date:Description Quantity Rate Unit Amount Rs.Job Work For One Set 62500.00Reduction of coil Sizechallan and GR attached) 62500.00Depatehed through: Vasan 5. The above invoice is not an invoice for a furnace of a particular capacity. The capacity of the existing furnace was being altered so as to reduce it from 4 M.T. to 3 M.T. In such a case, verification authorities of the capacity by the Central Excise cannot be faulted.

Since, upon verification, the capacity was found to be reduced only to be 3.59 MT, the authority was justified in fixing annual capacity of production based on that furnace capacity. We are not able to agree with the appellant's Counsel that the verification carried out amounts to levying duty based on actual production. In the present case, a furnace of a particular capacity has not been bought and installed.

Instead, the existing capacity was being altered by a job work.

Therefore, there was no machine capacity certified by machine manufacturer. Therefore, verification has to be treated as quite in order. The questions of demand of duty on actual production would arise only if the authorities had ascertained the quantum of goods manufactured during the relevant period and then demanded duty on that quantity. That has not taken place. Instead, the capacity of the furnace has been determined by a proper method of valuation and annual production capacity has been determined based on the furnace capacity.

Such an action is entirely in terms of the rules. We find no reason to interfere with the same. The appeal fails and is rejected.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Daksh Steels Pvt. Ltd. vs Cce Same Subject Land Acquisition Same Judge K Usha, N T C.N.B.