ORDER
V.K. Agrawal, Member (T)
1. Raj Ratan Castings (P) Ltd. has filed the present appeal against the Order-in-Original No. 15/2002 dated 205.2002 by which the Commissioner has fixed capacity of furnace as 4.28 M.T. and accordingly determined their Annual Production Capacity as 27,392 M.T. and rejected their request for determination of Annual Production Capacity under Section 3A(4) of the Central Excise Act based on actual production for the period prior to 20.11.99.
2. Shri Lajja Ram, learned Advocate, mentioned that the Appellants are not pressing the appeal for determining their Annual Production Capacity on the basis of actual production prior to 20.11.99. He, further, mentioned that the Appellants manufacture M.S. Ingots of non-alloy steel in respect of which they were required to pay Central Excise duty on the basis of capacity of Induction Furnace determined under Section 3A of Central Excise Act, read with Induction furnace Capacity Determination Rules, 1997; that they had declared the capacity of their furnaces as 4.025 M.T. x 2 on the basis of report dated 16.2.99; that they had enclosed 2 invoices from the manufacturer of Induction Furnace; that in terms of Induction Furnace Annual Capacity Determination Rules, 1997 (hereinafter refer to Capacity Determination Rules), the Annual Capacity shall be determined on the basis of authenticated copy of the manufacturer’s invoice or trader’s invoice who have supplied or installed the furnace; that only when the manufacturers invoice is not available, the capacity of furnace could be ascertained on the basis of capacity of comparable furnace installed in other factory in respect of which manufacturer’s invoices indicating the capacity of furnace is available; that even then it is not possible the capacity can be fixed on the basis of any other material as may be relevant for this purpose; that for this purpose the Commissioner, if he so desires, could consult any technical authority; that in the present matter the Adjudicating Authority without following the sequence given in the Capacity Determination Rules has determined the capacity on the basis of a report; that the findings of the Adjudicating Authority that no order of precedence has been stipulated in the Capacity Determination Rules is not correct and is not based on legal provisions. Reliance has been placed on the decision in the case of Ganpati Industries v. CCE, Kanpur, 2000 (40) RLT 308 (CEGAT), Arihant Steels v. CCE, 2000 (124) ELT 564 and Ranjeev Alloys Ltd. v. CCE, Meerut, 2001 (75) ECC 653 (T) : 2001 (96) ECR 518 wherein it has been held that the capacity of Induction Furnace as shown in the invoice of the manufacturer/supplier has to be taken as the basis for determination of Annual Capacity of Production. He also referred to the decision of the Tribunal in the case of Rayalseema Steel Re-rolling Mills v. CCE, in which the Tribunal vide Final Order No. 968/2002 dated 26.7,2000 has held that measurement of the parameter of the Steel Rolling Mills is a job requiring technical expertise and knowledge and if the parameters are declared to be challenged material evidence from the experts in the field is to be procured; that the Tribunal held that the Order of the Commissioner holding the furnace machinery to be other than batch, dye was found to be incorrect as the technical report filed by the Assessee had not been impugned by any other material; that the appeal filed by the Revenue has been dismissed by the Supreme Court as reported in 2003 (757; ELT A 201 (SC). The learned Advocate mentioned that no expert opinion had been obtained by the Commissioner in the present matter.
3. Countering the arguments Shri Kumar Santosh, learned SPR, reiterated the findings as contained in the impugned Order and submitted that the Commissioner is the competent authority to determine the Annual Production Capacity of a furnace in context to the total capacity of the furnace installed; that the Commissioner has the right to verify physical capacity of a furnace under the provisions of Capacity Determination Rules; that the invoices are merely in respect of the modified furnaces and not really in effect authenticated invoices of manufacturer; that the course adopted by the Commissioner is completely within the framework of the law.
4. We have considered the submissions of both the sides. Rule 3 of the Induction Furnace Annual Capacity Rules, 1997 provides that the Annual Capacity of Production shall be determined in the following manner:
(i) The Commissioner shall call for an authenticated copy of manufacturer’s invoice or trader’s invoice who had supplied or installed the furnace and ascertain the total capacity of furnaces installed in the factory on the basis of such invoice or document.
(ii) If the invoice or document referred to in (i) is not available, the Commissioner shall ascertain the capacity of the furnaces on the basis of capacity of comparable furnace installed in any other factory in respect of the manufacturer’s invoice or other document indicating the capacity of the furnace.
(iii) If not so possible, the Commissioner shall ascertain the capacity of the furnace on the basis of any other material as may be relevant for this purpose.
5. It has been held by the Appellate Tribunal in the case of Arihant Steel (supra) that when the Appellants had produced certificate from the manufacturer of the furnace as well as their invoice which shows the capacity as 1 M.T. there is no need for the Commissioner to ascertain the position by alternate method under Sub-rule (2) of Rule 3 of the Capacity Determination Rules. It has also been held by the Tribunal in the said decision that if the Commissioner was not for any reason satisfied with the certificate he should have recorded the reasons for rejecting the same and for making a further inquiry under Rule 3(2). In view of these decisions the finding of the Commissioner that no order of precedence is stipulated in Rule 3 of Capacity Determination Rules is not correct. However, we find force in the submissions of the learned SDR and the finding in the impugned Order that the certificates dated 19.4.99 and 11.5.99 which had been produced by the Appellants for determining the capacity of both the furnaces installed in their factory are in respect of labour charges for modification of medium frequency induction melting furnace copper coil. These are invoice given by Superheat Electromag P. Ltd. who have reduced the coil and height and on the basis of that they have mentioned the holding capacity to be 4025 kgs. of liquid steel. The Appellants have not controverted the submissions of the learned SDR to this effect. We observe from the documents brought on record that Superheat Electromag P. Ltd. had supplied to the Appellants 2 Nos. of 5 tones capacity induction melting furnace in the past which had been modified by them in 1999. Such invoice for labour charges cannot be treated as authenticated copy of invoice referred to in Sub-rule (1) of Rule 3 of Capacity Determination Rules. Accordingly the Commissioner has gone by the actual parameters of the furnace which were taken in the presence of the witnesses and the Director of the Appellant company. We, therefore, find no infirmity in the impugned Order and reject the appeal.