Hon'ble TATIA, J.—The appellant has preferred this Excise Appeal under Section 35-G of the Central Excise Act, 1944 to challenge the order dated 24.8.2010 (Ex.P/12), 7.10.2004/30.9.2004 (Ex.P/9) and 30.7.2003 (Ex.P/5) and prayed for upholding that the liability determination order dated 5.10.1999 (Ex.P/2) merged into order dated 30.7.2003 (Ex.P/5) passed by the respondent no.3 – the adjudicating authority under Section 11A of the Central Excise Act, 1944 and not challenging the said order dated 5.10.1999 is not fatal and cannot come in the way of the appellant – assessee.

2. Brief facts of the case are that appellant is a company registered under the provisions of the Companies Act, 1956 and controversy pertains to the processing unit of the appellant company which was earlier known as “Banswara Textile Mills Ltd.” which now stands amalgamated in the appellant-company “Banswara Syntex Ltd.” as amalgamated under the provisions of the Companies Act, 1956 w.e.f. order dated 28.9.2006 passed by the Company Judge of this court.

3. The controversy arose with reference to the legality of levy of Central Excise Duty on the “Galleries” attached with the “Hot Air Stenter” under the rules known as Hot Air Independent Textile Processors Annual Capacity Determination Rules, 1998 (hereinafter referred to as the Rules of 1998 for short). The appellant first faced the order dated 5.10.1999 passed by the Commissioner, Central Excise, Jaipur-II whereby after taking into consideration the galleries while computing the annual capacity of production in terms of value, it has been held by the assessing authority that assessee is required to pay duty @ Rs.1.50 lac per chamber per month resulting into total duty per month Rs.22,20,000/- w.e.f. 8.9.1999. The petitioner against this liability paid Rs.21,91,500/- during the period 1.11.1999 to 29.2.2000 and there was short payment of only Rs.1,14,000/-. The petitioner challenged the said order dated 5.10.1999 by preferring SBWP No.3080/1999 before this Court.

4. It appears that in view of the finality of the order dated 5.10.1999, after withdrawal of the writ petition of the appellant, a demand notice was issued against the appellant by the respondent no.4 – Superintendent, Central Excise Range, Banswara. By this demand notice dated 13.11.2000, the appellant was asked to show cause as to why the central excise duty to the extent of Rs.1,14,000/-should not be demanded and recovered from the appellant subject to the final decision of the writ petition no.3080/1999, which was pending at that time. The appellant-assessee submitted reply the above said show cause notice dated 3.11.2000 on 21.2.2001 and took the plea that larger bench of 3 members of the tribunal in the case of Sangam Processors Ltd, Bhilwara reported in 2001 (42) RLT 49 has held that under the Rules of 1998 “galleries” are not to be included in “Hot Air Chamber” for finding out the production capacity. The respondent no.3-adjudicating authority accepted the plea of the appellant vide order dated 30.7.2003 and dropped the proceedings initiated vide demand – cum – show cause notice dated 3rd Nov., 2000. The copy of this order dated 30.7.2003 is Ex.P/5.

5. It will be worthwhile to mention here that before above order dated 30.7.2003 was passed to drop the recovery proceedings, the petitioner withdrew that writ petition on 3rd July, 2002 with liberty to challenge the order of the tribunal. The operative part of the order passed by this Court in petitioner's said writ petition no.3080/1999 is as under: -

“Learned counsel seeks permission to withdraw the instant writ petition. Hence, the writ petition is dismissed as withdrawn. The petitioner is given liberty to challenge the order of the CEGAT if the necessity so arise. Since the writ petition was pending before this court the appropriate authority will consider this fact favourably to the petitioner while considering the application for condonation of delay in filing the appeal.”

6. Admittedly