ORDER
Mrs. Archana Wadhwa
1. Briefly stated the facts are as under:-
The appellants are engaged in the manufacture of rods and flats classifiable under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 and have a rolling mill for the said purposes. With introduction of Hot Re-Rolling Steels Mills Annual Capacity Determination Rules, 1997 and for the purposes of determination of annual capacity of production in the appellants rolling mill, the joint verification was conducted by the appellants representative and the Central Excise Officers. In the Joint Verification Report dated 14.11.94, apart from recording various parameters and particulars of the mill, total actual production during the previous year i.e. 1996-97 was also recorded. Based upon that report and based upon the manner as envisaged in Rule 3 of the said Rules, the Commissioner of Central Excise, Jamshedpur vide his Order dated 19.2.98 fixed the annual capacity of production as 3044.531 MTs. The appellants discharged their duty liability during the relevant period in accordance with the annual capacity was fixed by the Commissioner in terms of the above Order.
2. Thereafter, they were issued a show cause notice on 12.3.99, almost after a gap of one year proposing to enhance their annual capacity of production in terms of the provisions of Rule 5 of the said Rules. Rule 5 is to the effect that if the annual capacity determined under sub-rule 3 of Rule 3 of the said Rules is less than the actual production of the mill during the financial year, 1996-97, then the annual capacity so determined shall be deemed to be equal to the actual production of the mill during the financial year, 1996-97. Accordingly, a notice proposed to enhance the annual production capacity to 6095.795 Mts instead of earlier fixed capacity of 3044.531 Mts. The notice also proposed imposition of penalty and recovery of interest from the appellants during the period in question for non-payment of duties. The said Order culminated into the impugned Order passed by the Commissioner enhancing the annual capacity and confirming differential duty for the period – 1997-98 and 1998-99.
3. Shri S.P. Majumdar, learned Advocate for the appellant has appeared before us and raised a number of grounds. It has been argued by him that when the Commissioner fixed the annual capacity of production vide his Order dated 19.2.98, the entire facts including the factum of actual production during the period 1996-97 were before him. They have paid the duty in accordance with the Order passed by the Commissioner. Subsequent issuance of show cause notice after a gap of one year by the Commissioner for revision of the annual capacity of production in accordance with the Rule 5 amounts to review of his own Order, which is not permissible under the law. He, further, submits that in any case, the show cause notice having been issued after the normal period of limitation is time-barred in terms of the provisions of Section 11A. In support of his above submission, he refers to the Tribunal’s decision in the case of Jayraj Ispat Ltd. vs. Commissioner of Central Excise, Hyderabad reported in 2000(115)ELT-346(Tribunal) wherein it has been held that there is no provision under the said Rules or Act empowering the Commissioner to re-determine the capacity of annual production.
4. Shri A.K. Chattopadhyay, learned J.D.R. for the Revenue appearing for the Revenue submits that Rules 5 of the Rules in question clearly lays down that where the annual production capacity determined in accordance with the Rule 3 is less than the actual production during the period, 1996-97 than the annual capacity so determined, shall be deemed to be equal to the actual production of the mill during the financial year, 1996-97. According to him, no formal order was required to be passed by him and the production capacity fixed under Rule 3 by him would automatically get enhanced by the fiction of law created under the provisions of Rule 5 of the said Rules.
5. As regards limitation, he leaves the matter to the discretion of the Bench.
6. We have considered the submission made from both sides. The facts as narrated in the preceding paragraphs clearly show that at the time of fixation of annual production capacity in February, 1998, the entire facts including the factum of actual higher production during the last year, 1996-97, were before the Commissioner. The Order fixing the annual production capacity was passed by him under the provisions of Section 3A of the Act which provides that the Commissioner shall fix the annual capacity of production in a hierarchial manner, as provided therein. The Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 enacted under sub-section of Section 3A of the Act provided for determination of annual capacity of production, lays down the manner for doing the same. As such, these are the Rules which have to be followed by the Commissioner while fixing the annual capacity of a mill. In the present case, the Commissioner has fixed the annual capacity in terms of Rule 3 of the said Rules whereas the Revenue’s case is that it is Rule 5 which had to be applied. The appellants have strongly contended that the Commissioner cannot review his Order as regards the fixation of annual capacity of production for which they rely upon the Tribunal’s decision in the case of Jayraj Ispat ltd. referred supra. By applying the said decision, we find that in the absence of any suppression on the part of the assessee, it was not open to the Commissioner to review his own Order retrospectively.
7. As regards the appellants contention about the limitation, we find that the show cause notice was issued on 12.3.99 proposing to recover the differential duty for the period 1997-98 and 1998-99. No suppression has been alleged in the show cause notice, neither is there any finding given by the Commissioner in his impugned Order. As such, we find that the show cause notice dated 12.3.99 is barred by the normal period of limitation of six months de-barring the duty-demand beyond the period of six months from the date of issuance of the show cause notice. We order accordingly. The appeal is disposed of in the above terms.