CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH COURT NO. 2 (Arising out of Order-in-Original No. 01/2012 dated 08.06.2012 passed by the Commissioner of Central excise, Bangalore)

Bhuwalka Castings and Forging Pvt Ltd (Formerly Known as Bhuwalka Steel Industries Ltd,)

Plot No. 17-20, Tamaka Industrial Area, Kolar, Karnataka – 563101. ………….Appellant VERSUS Commissioner of Central Excise, Bangalore-I P.B. No. 5400, Central Revenue Building, Bangalore, Karnataka – 560001. ……….Respondent Appearance:

Mr. A.S. Monnappa, Advocate for the Appellant Mr. Rajesh Shastry, Authorised Representative for the Respondent Coram:

Hon'ble Mr. P.A. Augustian, Member (Judicial)

Hon'ble Mr. Pullela Nageswara Rao, Member (Technical)

Final Order No. 20863 /2025 Date of Hearing: 19.12.2024 Date of Decision: 18.06.2025 Per: P.A. Augustian The issue in the present appeal is regarding assessment of the production capacity and demand of differential duty for the period from 01.09.1997 to 31.03.1998 and whether provisions of repealed Notifications without any saving clause can be invoked.

2. The appellant is manufacturing “MS/Carbon Steel”. Since the appellant could not produce authenticated invoice to ascertain the production capacity to discharge the central excise duty, appellant had informed the respondent that the total capacity of the unit is 3.6 metric ton and as per the assessment, they shall pay excise duty for 3(three) metric ton capacity on pro rata basis. However, the respondent refixed the capacity and the appellant had challenged the same. In response to that, respondent as per letter dated 30.09.1997 directed the appellant to produce authenticated copy of manufacturer invoice to re-assess the capacity. Accordingly, appellant had produced the invoice and certificate issued by Chartered Engineer for re-considering the capacity of production and also requested to consider the sanctioned power from Karnataka Electricity Board (KEB). However, respondent refused to reconsider the capacity assessed by them. The appellant had approached Hon’ble High Court of Karnataka by filing Writ Petition No. 10473/1998 for directing the respondent to re-determine the Annual Production Capacity after considering the power factor (PF) and technical opinion. Hon’ble High Court of Karnataka vide judgment dated 18.03.2003 in Writ Petition No. 10473/1998, allowed the writ petition and directed the respondent to consider the power factor and re- determine the actual capacity in terms of observation made by the Hon’ble High Court of Karnataka. In the meantime, considering the above judgment, appeal filed by the appellant was also disposed by this Tribunal. However, respondent filed Writ Appeal No. 4056/2003 challenging the judgment in Writ Petition No. 10473/1998 and the appeal was disposed by setting aside the direction of learned Single Judge and the contention of the appellant regarding power factor is kept open to be urged before the Competent Authority. Thereafter, in the Denovo Adjudication as per the impugned order dated 06.06.2012, respondent re-determined the production capacity as per section 3A (2) of the Central Excise Act, 1994 as the same determined earlier without considering the power factor as per the following:-

(i) re-determined the annual capacity of production of the notified goods viz., Non Alloy Steel Ingots as 16,000 MTs in terms of Section 3A(2) of the Central Excise Act, 1944 read with the provisions of Induction Furnace Annual Capacity Determination Rules, 1997;

ii) determined the pro rata production the capacity for the period 01.09.1997 to 31.03.1998 as 9,333.333 MTs;

iii) accepted the option exercised by the Appellants under Rule 96ZO(3) of the Central Excise Rules, 1944 for the purpose of payment of duty under Section 3A of the Central Excise Act, 1944;

iv) directed the Appellants to discharge the duty liability in respect of the annual capacity or as the case may be, the pro rata capacity for the period from 01.09.1997 to 3