ORDER
Gowri Shankar, Member (T)
1. Appeal 4032/02 is taken up for disposal with the consent of both sides, after waiving deposit. The connected appeal 4031/02 which was not listed to day was also, with the consent of both sides, taken up for disposal. There is no question of stay in this appeal.
2. The appellant was operating a rolling mill and in accordance with the provisions of Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 made an application on 26.3.1999 for determination of the capacity of the mill. The Commissioner has passed an order determining the capacity at 3205 ton. By its application dated 26.3.1999 the appellant addressed to the Commissioner asking for redetermination of the capacity, on the ground that the changer of two of the parameters which have the bearing to the final capacity. This application seems to have been received by the Commissioner on 26.3.1999 itself. It wrote further letter to the Commissioner on 2.6.1999 in which it stated that it had changed the parameters of the machinery to those mentioned in its application pointing out that these parameters have been verified by the range officers during their visit to its plant. It therefore requested for approval of the annual capacity at the lower level than of 1302 tons. It however continued to pay duty at the earlier higher capacity. There was no response from the Commissioner to this letter. In November 1999 the appellant, on its own, commenced to pay duty at the reduced capacity of 1205 tons. There was still no response from the department. It wrote another letter to the Commissioner on 14.2.200 and again on 15.5.2000 asking for the revised rate to which there was no reply of letter on 17.7.2000 informing that the appellant had on 17.7.2000 finally provoked the response from the Commissioner by letter of Superintendent Technical informed the assessee that since it had changed the installed capacity without written approval of the department, it request for revising the revised parameters cannot be acceded to. The assessee appealed this communication to the Commissioner (Appeals).
3. The Superintendent’s letter was followed by a show cause notice demanding duty short paid with reference to the capacity initially determined. The notice was adjudicated by the Deputy Commissioner who confirmed the demand. It is the order of the Commissioner (Appeals) dismissing the appeals by the assessee against this order which is the subject of these appeals before us. The Commissioner (Appeals) in fact passed a common order disposing of both the appeals.
4. In that order the Commissioner has merely reiterates what the Superintendent said that since the assessee did not obtain the written permission of the Commissioner for change in parameters before effecting the change of parameters, the request for change cannot be considered. The application for redetermination of the capacity even if being put up to the Commissioner what action no response to a letter of the departmental representative, there was initially a request by the Commissioner to grant time to produce the file. Although this time has been given, the file still not produced.
5. The appellant contends that it waited for two months after filing its application for the Commissioner to act upon it before effecting the change in the capacity. That change was carried out, if the assessee’s letter of 2.6.1999 is to be believed (and no reason is shown why it should not be) after the officers verified the change in the parameters. Even so, the appellant continued to pay duty at the higher rate for a further period of three months. The Rule 4 (2) does provide that the manufacturer shall intimate the proposal change to the Commissioner one month in advance from the change and obtain the written approval before making such change and the Commissioner shall then determine the date which the change in the installed capacity shall be deemed to be effective. But in a situation where the assessee even if the officers verified eh parameters, they have not given their recommendation even after five letters, we fail to see what the assessee could have done. Going by the provisions of the Chandigarh Commissionerate’s trade notice 40-CE/99 of 2.11.1999, including no doubt by various other commissioners including the Commissionerate of Surat, the jurisdictional Superintendent shall take two days, the divisional Assistant Commissioner two days, and the Commissioner 15 days in order to deal with the issues. Allowing for equal period for transit, the application should have been disposed of within 38 days from its receipt. We do not see why the provisions of this trade notice should not bind the Commissioner and the officers as it is required. In the alternative, the assessee would be left with no option but to keep on paying duty at the higher rate till such time the Commissioner decides upon the application for change in the parameters. We also note that the last paragraph of the trade notice provides as under:
“3. The following procedures shall be followed for obtaining the Commissioner’s permission for change in Annual Capacity of the unit:
(a) The assessee who intends to change the installed capacity of the induction furnace/re-rolling mill/textile machinery, shall apply with the details of the proposed changes to the Commissioner of Central Excise with a copy to the jurisdictional Assistant Commissioner of Central Excise and Superintendent concerned of Central Excise Range, at least one month in advance;
(b) The Superintendent of Central Excise shall examine the request and submit his recommendation along with latest duty liability position to the Divisional Assistant Commissioner/Deputy Commissioner within two days of the receipt of request;
(c) The Divisional Assistant Commissioner/Deputy Commissioner shall forward the recommendations of Range Office with his comments on the same within next two days to the office of the Commissioner of Central Excise for necessary permission.
(d) The Divisional Assistant Commissioner/Deputy Commissioner should follow up with the office of the Commissioner to ensure that the necessary permission is granted and communicated to the party within next 15 days.
(e) In case no report/comments are received from the Division office within stipulated time, it shall be deemed that Divisional Officer/Range Officer has no objections and the necessary permission shall be granted. The concerned Range Officer shall be accountable for any loss of revenue to the exchequer in such cases.”
6. From the provisions of the trade notice it appears that the intention is to ensure that any application for change in parameters should be disposed of within a month from the date on which the assessee makes the application. The total time taken by each of the officers concerned about 19 days and providing no doubt again for tranship corresponding, by applying the provisions of paragraph 3 (e) of the trade notice, the Commissioner does not require obtain any report or comments from the subordinate officers which shall be deemed that he has no objection from the permission to be granted. No doubt the circular does not deal a case in which the Commissioner after received whatever comments he wants, he still not taken any action on the application. However, it appears that the intention is to ensure that where an assessee has not committee any lapse and followed the procedure he should not suffer for delay by the officers. The application of the appellant was received on the same day by the Assistant Commissioner supported by a chartered engineer’s certificate which has apparently been verified. It carried out the change in parameters on 1.5.1999 more than a month after that. The appellant states that it has no objection to the change in parameters being effective from 1.11.1999 which will be seven months from the date of the application. This appears to us to be reasonable. On the facts of this case therefore, it would follow in consequence therefore the orders of the Commissioner (Appeals) cannot be supported and is set aside and the appeals are allowed.