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Judgment
M. Jaichandren, J.—W.P. No. 12943 of 2005 :- The Writ Petition has been filed praying for the issuance of a Writ of Certiorarified
Mandamus to call for the records of the first respondent in Appeal No. E/225 of 2002 and quash the Final Order No. 283/2005, dated
01.03.2005, passed by the first respondent and further direct the first respondent to take up the appeal No. 225 of 2002 for hearing on merits.
W.P. No. 12944 of 2005 :- The Writ Petition has been filed praying for the issuance of a Writ of Certiorarified Mandamus to call for the records
of the first respondent in Appeal No. E/597/2004 and condonation delay application No. E/COD/252/2004 and quash the final order No. 973/04
and the Miscellaneous order No. 641/04, dated 03.11.2004, passed by the first respondent and further direct the first respondent to take up the
appeal No. E/597/2004 for hearing on merits.
Heard the learned Counsel for the petitioner as well as the respondents. By consent of the learned Counsels, the writ petitions have been taken
up for final hearing and disposal. Since the facts in both the writ petitions are common and the issues to be decided are also connected to one
another, a common order is passed in both the writ petitions.
The brief facts of the case, as stated by the petitioner, are as follows:
The petitioner had started a small scale hot re-rolling mill for production of Plain MS rods and Reinforced for Steel rods with effect from
02.06.1998. The hot re-rolling Mills come within the Hot re-rolling steel mills (Annual capacity determination) Rules, 1997, whereby, the capacity
of production is to be fixed taking into account the various parameters, including the type of furnace, nominal centre distance of pinions, RPM of
the drive, number of hours of operation etc. Originally, the petitioner''s factory came under the jurisdiction of Commissioner of Central Excise,
Chennai, and thereafter, the jurisdiction was shifted to the Commissioner of Central Excise, Pondicherry, the second respondent herein . The
Commissioner provisionally fixed the annual capacity of production as 511.393 MT and communicated the same to the petitioner, on 09.07.1998.
It is the further case of the petitioner that the petitioner had filed an application, dated 18.06.1998, along with a Chartered Engineer''s report as
Technical Expert''s report, as required under the rules. The Technical Expert Certificate had given various parameters of the plant and worked out
its annual capacity. The type of furnace owned and used by the petitioner was clearly given in the Technical Expert''s Certificate as ''batch type''
while fixing the annual capacity of production. However, the Commissioner of Central Excise, Chennai, had failed to consider the same and issued
a letter, dated 04.12.1998, fixing the annual capacity of production at 984.299 MT, resulting in the payment of Rs. 12,303/- per month. The
deemed number of utilised hours as per the hot re-rolling steel mills (Annual Capacity Determination) Rules, 1997, for one ''batch type'' furnace is
1200 hrs, whereas, it is 2400 hours per annum for one or more ''pusher type'' furnace. It is stated that the petitioner did not realise that the annual
capacity of production had been wrongly fixed by the Commissioner, at double the capacity of production of the petitioner''s plant, due to taking
the furnace as ''pusher type'' instead of ''batch type'', as mentioned in the certificate. The petitioner came under Rule 96ZP(3) of the Central Excise
Rules, 1944, and were paying duty at compounded rate of Rs. 12,303/- per month till January, 2000. This amount is calculated based on the type
of furnace used in the re-rolling mills. The petitioner had filed an application, dated 18.06.1998, along with the Chartered Engineer''s Certificate
stating that the type of furnace used was of ''batch type'' and not of ''pusher type''.
The petitioner having realised that the annual capacity of production had been wrongly fixed by the Commissioner, did not pay the duty for the
months of February and March, 2000, and had written to the Commissioner about the mistake in fixing the annual capacity of production,
requesting the commissioner to re-work the duty for the past periods, for which the petitioner had been paying double the duty. In the meanwhile,
the petitioner firm was closed, with effect from 13.03.2000, and had not resumed work till date. While so, the Commissioner had advised the
petitioner to file a refund claim after paying the duty amount for the months of February and March. Thereafter, the petitioner was issued with a
show cause notice, dated 02.05.2000, demanding a duty of Rs. 24,606/- along with interest and proposing a mandatory penalty under Rule
97ZP(3). The petitioner by a reply , dated 31.03.2000, had pleaded for refund of the balance amount after adjusting the dues fixing the
appropriate capacity for a ''batch type'' furnace which was the one actually used by the petitioner. However, the Commissioner had passed an
order confirming the demand of duty rejecting the claim for re-determination of the annual capacity of production. Aggrieved by the said order of
the Commissioner, the petitioner had filed an appeal No. E/225/2002, before the first respondent, on the Duty Demand and Refund of the excess
duty paid.
During the course of the hearing of the appeal, it was found that unless the order fixing the annual capacity was challenged, the appeal
demanding the duty could not be sustained. Hence, an appeal No. E/597/2004, was filed before the Tribunal challenging the order of fixation of
annual capacity of production along with an application No. E/COD/252/2004 for condonation of delay of 1883 days in filing the appeal. The
petition to condone the delay was dismissed on 03.11.2004. Consequentially, the appeal challenging the fixation of annual capacity of production
was also dismissed. The appeal challenging the Demand of Duty was heard subsequently and it was dismissed on the ground that the appeal is only
consequential to the other appeal which had already been dismissed. Hence, the petitioner had filed the present writ petitions.
A common counter affidavit has been filed on behalf of the respondents in both the above mentioned writ petitions. In the counter affidavit, it has
been stated that the determination of annual capacity of production (ACP) under Rule 96ZP was done by the Commissioner of Central Excise,
Chennai, based on the application of the petitioner mills, dated 18.06.1998, wherein it is said to be stated that the type of furnace used in the
petitioner''s factory was ''pusher type''. Accordingly, the annual capacity production was fixed at 984.229 MT by the Commissioner vide order,
dated 04.12.1998, resulting in the payment of Rs. 12,303/- per month by the petitioner. The petitioner had paid duty at the rate of Rs. 12,303/-
per month, under the Compounded Levy Scheme, for the period from June, 1998, to January, 2000. Their duty liability for the period from
February, 2000, to March, 2000, have not been paid. The levy of excise duty was withdrawn by the government with effect from 01.04.2000.
However, the demand pertaining to the period February, 2000, to March, 2000, was confirmed by the Assistant Commissioner of Central Excise,
Chengalpattu Division, vide Order-in-Original No. 30/2001, dated 11.09.2001, against which the petitioner had preferred an appeal. The
Commissioner (Appeals), Chennai, vide Order-in-Appeal No. 23/2002, dated 15.03.2002, had upheld the earlier order. Further, the appeal had
been preferred to the CESTAT, Chennai, and the Tribunal vide its final order No. 283/2005, dated 01.03.2005, had dismissed the appeal on the
ground of delay.
It is the case of the respondents that the petitioner did not submit the Chartered Engineer''s Certificate, Chennai, along with their declaration,
dated 18.06.1998. Paragraph 4 of the counter affidavit reads as follows:
In this regard, it is pertinent to note that the Honourable Supreme Court in the case of Bharat Nandalal Kalyani v. Commissioner of Customs
(Preventive) 1997 (94) ELT.A. 251 had held that unexplained delay in filing the appeal is not condonable. The Apex Court, further, in the case of
TISCO v. Commissioner of Central Excise 1996 (83) ELT.A. 46 had held that delay in filing appeal due to negligence cannot be condoned. The
Honourable Madras High Court in the case of Vellathurai Vs. State of Tamil Nadu, had held that long delay of 1099 days of delay in filling an
appeal is not condonable. Similarly, the Honourable Madras High Court in the case of Navilkal Tea Factory Vs. CEGAT, had held that a delay of
18 months in filing the appeal attributable to appellants own negligence is not condonable despite the plea of strong prima-facie case on merits. The
Honourable Kerala High Court in the case of Assistant Collector of Central Excise and Others Vs. Ruby Rubber Works Ltd., had held that delay
in filing the appeal cannot be condoned under Article 226 of Constitution of India by the High Court when the Officers below had refused to do
so. Similarly, the Honourable Madras High Court in the case of Murali Match Works Vs. CEGAT, had also held that High Court is not an
appellate authority to consider the validity of CEGAT''s order under Article 226 of Constitution of India.
However, it is found that the facts of the present case are different from those that have been cited above. Further, on an analysis of the facts in the
present case, this Court is of the considered view that there are sufficient grounds to show that the delay in challenging the Commissioner''s Order
fixing the annual capacity of production is neither wilful nor wonton. Further, no prejudice would be caused to the respondents, if the Appeal No.
E/225 of 2002, is heard and disposed of on merits.
In the above facts and circumstances of the case, the writ petition No. 12944 of 2005 is allowed as prayed for by setting aside the order of the
first respondent order No. 641/04, dated 03.11.2004, made in the condone delay application No. E/COD/252/2004, and the final order No.
973/04, dated 03.11.2004, made in Appeal No. E/597/2004. Further, the first respondent is directed to take up on its file Appeal No.
E/597/2004 and hear the same, giving sufficient opportunity to the parties concerned, and dispose it of on merits and in accordance with law within
a period of eight weeks from the date of receipt of a copy of this order. Consequently, the connected W.P.M.P and W.V.M.P. stand closed. The
petitioner is directed to pay Rs. 2,000/- as costs to the Tamil Nadu State Legal Services Authority, Chennai, within a period of seven days from
the date of receipt of a copy of this order.
In view of the order passed in writ petition No. 12944 of 2005, this Court finds it appropriate to set aside the final order No. 283/2005, dated
01.03.2005, passed by the first respondent and to direct the first respondent to take up on its file Appeal No. E/225 of 2002 and to hear the
appeal, giving sufficient opportunity to the parties concerned, and to dispose of the same on merits and in accordance with law, within a period of
eight weeks from the date of receipt of a copy of this order.
The writ petition is allowed with the above directions. Consequently, the connected W.P.M.P and W.V.M.P are closed.