ORDER
K.K Agarwal, Member (T)
1. The appellants are having hot re-rolling mills for manufacture of non-alloy angles and channels of Heading No. 72.16 of the first schedule to the Central Excise Tariff Act, 1985. As per the newly introduced Section 3-A under Finance Act, 1997 their annual capacity of production was to be determined under Rule 3(1) of Hot Re-rolled Steel Mills Annual Capacity Determination Rules, 1997, wherein they were required to declare values of each of the parameters namely “d”,”n”,”i”, “e” and “w”. Out of these parameters 3 parameters namely “d”, “n” and “i” were to be determined by physical measurement. The appellants had 4 mills for the purpose of re-rolling but their mill No. 3 was dismantled as the same was of no use to them. The intimation of dismantling of Mill No. 3 was given by them to the department vide their letter dated 03-09-1999. The appellant got the value of each of the parameter measured by their chartered engineer and after his verification submitted the same to the Commissioner for determination of their annual capacity of production.
2. As per the value declared by them the capacity of their hot re-rolling of materials worked out to 1029 metric tonnes. To verify the correctness of the declared parameters of the re-rolling Mills the Commissioner deputed Superintendent of Central Excise who was stated to be an expert. The Superintendent verified the parameters and found that the 3rd Mill was closed and based on his observations submitted a report to the Commissioner. Thereafter they were granted a personal hearing by the Commissioner on 3-12-1999 wherein they explained the position of working of their re-rolling Mills and subsequently submitted the written submission and confirmed the discussion that took piece at the time of personal hearing. Their re-rolling mills was visited by the Addl. Commissioner for further verification of value of parameters. Thereafter the Commissioner himself visited the Mill on 14-12-1999 and had studied the working of the Mills and checked rolling production at various stages including that of finished Mills and examined the samples of the products emerging at every stage. The appellant requested for the furnishing of the copies of the verification report conducted by the Superintendent and Addl. Commissioner but the same was denied by the department. The Commissioner thereafter passed the order in Original fixing the annual production capacity of their Mill at 8511.028 meter tonnes per annum on the basis of the parameter of the Mill No. 3 which was dismantled for production.
3. The Learned Advocate for the appellant submits that the order is passed in violation of principles of natural justice and is therefore nullity in law. As per the Annual Capacity Determination Rules, the Commissioner is required to verify the correctness of parameters and if so desired with the help of technical expert. In the present case the verifications was carried out by the Superintendent and the Addl. Commissioner who are not technical expertise and whose report was never submitted to them so as to explain their case. The conclusion drawn by the Superintendent and Addl. Commissioner was contrary to the facts and therefore the whole proceedings have been vitiated in as much as on the subject which is a technical matter. The decision was arrived at on the basis of reports of the department’s officers who are not expert in the subject. They therefore requested that the matter should be remanded back to the Commissioner with directions to furnish them the copies of the report and the cross-examination of officers concerned with liberty to get all issues open.
4. We have considered the submission. We find that in this case there had been grave violation of principles of natural justice in as much as the report of the Range Superintendent and the Addl. Commissioner who verified the premises and arrived at certain conclusions was not furnished to the appellants to enable them to present their side of the case. Since these reports were crucial for determination of annual capacity of production and an important fact whether mill No.3 was actually closed or not was required to be furnished. The furnishing of the same was must and therefore the whole matter is required to be remanded back to the Commissioner with a direction that he should furnish the copies of the verification report and to hear the appellants to present their side of case and to make such submission as they desire and to decide the matter thereof.
6. We accordingly direct so.
7. The appeal is decided in above terms.
(Pronounced in Court)