M/S. PARAS SHIP BREAKERS LTD. versus COMMISSIONER OF CENTRAL EXCISE

Citation: [2007] 11 S.C.R. 419 · Decided: 12-10-2007 · Supreme Court of India · Bench: S.B. SINHA, H.S. BEDI

Judgment (excerpt)

~-· 
MIS. PARAS SHIP BREAKERS LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE 
OCTOBER 12, 2007 
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.] 
Central Excise Act, 1944-ss.JA and 35G-Deemed annual 
production-Manner of determination-Finding of fact by Tribunal 
against assessee-Appeal of assessee dismissed by High Court-
Correctness of-Held, correct as there was no question of law for 
consideration by the High Court. 
A 
B 
C
l 
Appellant-assessee had installed an induction furnace. The 
Department sought to determine the deemed annual production of D 
Appellant-assessee in terms of Section 3A of the Central Excise Act, 
1944 (brought into force w.e.f.14-05-1987) taking into consideration the 
capacity of the induction furnace when it was first installed viz. 8 M. T. 
Appellant-assessee contended that due to unavailability of requisite E 
electrical energy from the State Electricity Board it had to subsequently 
bring down the capacity of the induction furnace to 4Yz M. Ts and that 
the deemed annual production should be determined accordingly. A 
finding of fact was arrived at by the concerned authorities that the 
capacity of the said furnace was 8 M.Ts and not 4Yz M.Ts. Tribunal too F 
arrived at a finding of fact that no modification had been carried out in 
the capacity of the induction furnace. Appeal filed thereagainst was 
dismissed by High Court. Hence the present appeal. 
Dismissing the appeal, the Court 
G 
HELD: 1.1. The show cause notice was issued to the appellant by 
,..,-' 
the respondent on the premise thatthe capacity of the induction furnace 
is in excess of 4.5 MTs. The question as to whether in effect and 
substance the appellant had reduced the capacity of the said induction 
419 
H 
420 
SUPREME COURT REPORTS 
[2007] 11 S.C.R. 
A furnace or not is essentially a question of fact. The Tribunal has passed 
a very detailed order. It took into consideration all the contentions raised 
by the appellant. It is evident that on representation having been made 
by the appellant that the capacity of the furnace stood reduced, a Deputy 
Commissioner was deputed by the Department for the purpose of 
B measurement and verification of the parameters of furnace. The officers 
of the Department had actually seen the melting capacity of the furnace 
and'the average production. They took into consideration the actual 
production recorded in RGI registers. On verification of the relevant 
registers, it was found that the actual production recorded was nearer 
c to the level of8 M.Ts. The rule no doubt provides for determining the 
annual capacity in case where manufacturer proposes to increase or 
decrease the capacity of the induction furnace but before the said 
authorities even the concerned Chartered Engineer was examined, who 
in his statement, admitted that he had certified the capacity of the 
D furnace on the basis of the documents produced and information made 
available to him by the appellant. It was, therefore, evident that he had 
not carried out any physical verification of the furnace. According to 
the said witness, the actual production may vary from 10% to 20% of 
the capacity shown in the joint verification report. Even the officer of 
E Mis. Furcon Consultancy Services, stated that the modification had been 
carried out in one crucible only but a certificate was issued in respect of 
both the crucibles. The Tribunal, therefore, arrived at the finding that 
in fact no modification was carried out in the crucible of the said 
induction furnace. Various other circumstances which were relevant for 
p determiiaation of the issue, viz., the conduct of the parties, had also been 
taken into consideration. [Para 10] [424-F, G, II; 425-A, B, C, D] 
1.2. Upon consideration of all relevant facts, as a finding of fact 
had been arrived at by the Tribunal, the High Court cannot be said to 
G have committed any error in passing the impugned judgment. 
[Para 13] [426-G] 
H 
1.3. In terms of Section 35G of the Central Excise Act, the High 
h 
Court could entertain an appeal only if a question of law arose. No 
question oflaw having, thus, arisen for consideration before the High 
•·· 
M/S. PARAS SHIP BREAKERS LTD. v. COMMISSIONER 421 
OF CENTRAL EXCISE [SINHA, J.] 
Court, the impugned judgment does not suffer from any legal infirmity. A 
[Para 15] [427-C, D] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4841 of 
2007. 
From the final Judgment/Order dated 11.2.2005 of the High Court B 
of Gujarat at Ahmedabad in Tax Appe

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