[Order per : V.K. Agrawal, Member (T)]. -  The issue involved in this appeal, filed by M/s. Dina Iron & Steel Ltd., is whether they are to discharge Central Excise duty liability under Section 3 of the Central Excise Act or under Section 3A of the Act on the basis of the Annual Capacity of Production.

2. Shri B.N. Chattopadhyay, learned Advocate, submitted that the Appellants commenced manufacture of non-alloy steel ingots/billets falling under sub-heading 7206.90 of the Schedule to the Central Excise Tariff Act from 17-7-98; that in their declaration filed under Rule 173B of the Central Excise Rules, they mentioned that they had a composite plant having induction furnace with secondary refining facility and continuous casting facility within the same factory premises and accordingly claimed the benefit of payment of duty under Section 3 of the Act read with Notification No. 30/97-C.E.(N.T.), dt. 1-8-97 as amended by Notification No. 43/97-C.E. (N.T.), dt. 30-8-97; that, however, the Assistant Commissioner ordered for provisional assessment under Rule 9B of the Central Excise Rules, 1944; that Deputy Commissioner under Adjudication Order No. 47/2000, 15199, 100/99, 207/2000, dt. 7-3-2000, held that they did not fall within the provisions of Section 3 of the Act and were to discharge duty as per the provisions of Section 3A of the Act; that on appeal, the Commissioner (Appeals), under Order No. 285/Pat/C.Ex./ Appeal/2000, dt. 31-8-2000 remanded the matter to the Dy. Commissioner for de novo adjudication with certain directions. He also mentioned that consequent upon Adjudication Order dt. 7-3-2000 of the Dy. Commissioner, the Commissioner, under Order dt. 31-3-2000 determined their annual capacity of production provisionally for the financial years 1998-99 and 1999-2000; that however, the Appellate Tribunal, vide Final Order No. A-1482-Cal/2000, dt. 8-9-2000 remanded the matter to the Commissioner for readjudication, as principles of natural justice were not followed by the Commissioner. The learned Advocate, further, mentioned that another show cause notice dt. 20-2-2001 was issued to them for demanding duty for the financial years 1998-99 and 1999-2000 under Section 3A of the Act; that the Commissioner, under the impugned order dt. 18-12-2001 has confirmed the demand of duty and imposed penalty holding that they are liable for assessment under Section 3A of the Act. The learned Advocate contended that the show cause notice dt. 20-2-2001 was issued to the Appellants on the basis of Order passed by the Dy. Commissioner which had already been remanded by the Commissioner (Appeals); that without complying with the specific directions given by the Commissioner (Appeals), the matter cannot be decided; that the Commissioner (Appeals) had given the direction, while remanding the matter, that the sample of the metal from the induction furnace as well as of the product coming from the ladle i.e. the finished product should be drawn and got tested by a recognised laboratory for verifying the extent of impurities; that no such samples were drawn as the Adjudicating Authority in the impugned Order was of the view that at the belated stage there was no point or relevancy in drawing samples as the Appellants might have made modifications; that the direction in the remand Order has to be complied with. He further, submitted that the Commissioner (Appeals) had also directed that the expert opinion [of Shri Mukund V Sampat B.Sc., B.E. (MET)] filed by them should be discussed; that the findings in the impugned order to the effect that the said Report had made a detailed discussion about various theoretical aspects of secondary refining and had not anywhere mentioned or certified that the assessees were having secondary refining facility in their factory premises, are not factually correct; that the Technical Expert has clearly opined in his report as to how in their factory ladle refining took place; that according to Expert, the Appellants are making low carbon high quality billets mainly for reeling by patra mills up to 1 mm thickness and such their final product needs very pure and high quality billets and so secondary refining is a must. He finally submitted that the Adjudicating Authority has not disputed that the Joint Director of Industries had no technical qualification to furnish an opinion about the secondary refining in their factory; that the report of Shri Sampat is, therefore, required to be accepted in deciding the matter.

3. Countering the arguments, Shri A.K. Pandit, ld. DR, reiterated the findings as contained in the impugned order and pointed out that the Adjudicating Authority had complied with all the directions contained in both the remand Orders passed by the Appellate Tribunal and the Commissioner (Appeals); that the report of the joint inspection team had been supplied to the Appellants; that the Appellants have only challenged the technical capabilities of the Joint Director and have not challenged the reasons contained therein and the conclusion arrived at; that the Adjudicating Authority has discussed the Report given by Shri Sampet and given his reasons for not accepting the same; that the Adjudicating Authority has also mentioned the reasons in the impugned order as to why drawing of samples would be of no use; that a test report of finished goods would not lead to the conclusion that a particular factory is having a refining facility or not.

4. We have considered the submissions of both the sides, Notification No. 30/97-C.E. (N.T.) as amended by Notification No. 43/97-C.E. (N.T.), dt. 30-8-97 provided for levy and collection of excise duty on ingots and billets of non-alloy steel falling under sub-heading Nos. 7206.90 and 7207.90 of the Schedule to the Central Excise Tariff Act, manufactured in an induction furnace in accordance with the provisions of Section 3A of the Central Excise Act. However, Explanation to the Notification provided that Notification would not apply to a composite plant consisting of induction furnace with secondary refining facility and possessing continuous casting facility within the same premises. The Deputy Commissioner, under Order dt. 7-3-2000, held that the Appellants did not possess the secondary refining facility. The Commissioner (Appeals) remanded the said order with specific directions as under : -

(1)      The report of the Joint Inspection team consisting of the Joint Director of Deptt. of Industries, Bihar and the Deputy Commissioner, Central Excise, Patna to be supplied to the appellant and the case should be decided after hearing from them (appellant).

(2)      The merits of the expert opinion filed by the appellants should be discussed and a speaking order passed.

(3)      The sample of the metal from the induction furnace as well as of the product coming from the ladle, i.e. finished product, should be drawn after observing required formalities. The sample so drawn may be sent to a recognised laboratory for testing/verifying the extent of the impurities in both the samples. The test results may also be communicated to the appellant and their submission thereon obtained before deciding the case.

(4)      The Deputy Commissioner is also at liberty to make further study of the manufacturing process before passing the de novo order.

5. We find substance in the submissions of the ld. Advocate for the Appellants that the impugned order has been passed without complying with the directions contained in the order passed by the Commissioner (Appeals) inasmuch as no samples of the metal from the induction furnace as well as ladle were drawn and tested. The ld. Adjudicating Authority has not found the drawal of samples relevant as Compounded Levy Scheme is no longer in force and the assessee might have made modifications or that the plant and machineries had undergone changes. It is not open to the Adjudicating Authority to judge the relevancy of the directions given in the remand order. The directions given by the Commissioner (Appeals) are to be complied with before adjudicating the matter de novo unless and until those directions have been set aside by the higher appellate forum. Further, the ld. Adjudicating Authority has not found it necessary to draw samples on presumption and assumptions of modification without any basis. We, therefore, hold that the impugned order has not been passed after complying with the directions confessed in the remand order passed by the Commissioner (Appeals). Accordingly, the matter has to go back to the Adjudicating Authority. We also observe that the issue involved in the present dispute is a technical dispute as to whether the Appellant's unit is a composite plant consisting of induction furnace with secondary refining facility and possessing continuous casting facility, within the same premises. The Revenue is relying upon a report of Joint Inspection Team consisting of the Joint Director, Deptt. of Industries, Government of Bihar and Deputy Commissioner, Central Excise. The ld. Advocate has claimed that both these officers are not technically qualified to express an opinion on the issue involved and on the other hand they have submitted a report of a Technical Expert certifying that the quality of the steel manufactured by them can be made only by intermediate process of secondary refining. The Revenue has not brought on record any report from a technical person. In view of this, we remand the matter to the Adjudicating Authority with direction to get the plant of the Appellants examined by a Technical Expert to ascertain the factual position as to whether it is a composite plant consisting of induction furnace with secondary refining facility and possessing continuous casting facility, within the same premises at the relevant time and then adjudicate the matter afresh after following the principles of natural justice. The Appellants will also inform the Department about any modification/changes made by them in the plant and machinery during/after the relevant period. The appeal is thus allowed by way of remand. The Stay Petition also stands disposed of.