ORDER : AKIL KURESHI, J. 1. Department has challenged the judgment of the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [“Tribunal” for brevity] dated 20th April 2006. 2. Following questions were framed at the time of admission of the Appeal : [1] “Whether in the facts and circumstances of the case, the Tribunal was justified in entertaining an appeal against the letter of the Deputy Commissioner dated 27.02.2001 which is not an appealable order under Section 35B of the Central Excise Act ?” [2] Whether in the facts and circumstances of the case, is the Tribunal justified in remanding the matter to the Commissioner to refix annual capacity of production despite there being no challenge to the order of refixation of annual production capacity and determination of pro rata duty liability ?” 2. The respondent is a manufacturer of textile products. The Legislation has framed Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 2000 [“the Rules” for short]. As per these rules, every individual processor would have to make a declaration to the competent authority giving details of number of Hot Air Stenters installed in the factory and other necessary details connected therewith. Upon receipt of such information, Deputy Commissioner or the Assistant Commissioner would take necessary action to verify correctness of such declarations. Thereafter, in terms of Rule 4 of the said Rules, the annual production capacity of the processor would be determined, as also duty leviable arising out of such determination. 3. As per Rule 5, the independent processor would intimate to the Department any changes with respect to other parameters which would decide the annual production capacity. The respondent applied for fixation of annual production capacity under letter dated 13th April 1999. Such determination was made by the competent authority vide his Order dated 30th August 1999. For the period between 1st April 1999 to 31st March 2000, he had determined the annual production capacity in rupee term at Rs. 1240.44 lakhs and the resultant duty liability was calculated at Rs. 158.76 lakhs. It appears that the manufacturer had made representations dated 30th August 1999 and 4th September 1999 raising some dispute about this determination. The Assistant Commissioner passed his order of redetermination of the annual capacity on 8th February 2000. 1240.44 lakhs and the resultant duty liability was calculated at Rs. 158.76 lakhs. It appears that the manufacturer had made representations dated 30th August 1999 and 4th September 1999 raising some dispute about this determination. The Assistant Commissioner passed his order of redetermination of the annual capacity on 8th February 2000. In such order, he noted that the manufacturer was granted permission to remove one chamber from Stenter, which was accordingly removed. Though no permission was granted to remove the gallery, one gallery was also removed. This gallery was taken into account for the purpose of determining annual capacity from 1st April 1999. Apparently to give effect to this change, the redetermination order was passed in which annual capacity of production was calculated at Rs. 1147.72 lakhs and duty payable at Rs. 146.89 lakhs. 4. The respondent was still not satisfied. In a letter dated 6th February 2001, it was reiterated that the earlier representations have not been disposed of. The production capacity should be accordingly revised. This representation was rejected by communication dated 27th February 2001 conveying to the manufacturer that such belated objections cannot be entertained and if there was any grievance, the order fixing the annual capacity should have been challenged. 5. At that stage, the manufacturer filed an appeal in the Tribunal. The Tribunal noted that in the meantime, the Supreme Court in the case of Sangam Processors Bhilwara Limited, reported in [2002] 146 ELT 254 had held that while determining the annual production capacity, length of galleries cannot be taken into consideration. The Tribunal noted that this judgment would benefit the assessee, and therefore, remanded the proceedings before the competent authority for refixation of the annual production capacity. 6. We see no error in the view of the Tribunal. The Department’s main grievance appears to be that the communication which the manufacturer challenged was not an order which is appealable and the fixation of annual production capacity was not challenged by him. The facts on record would however suggest that the respondent did not give up challenge for fixation of appropriate annual production capacity. Part of the request was even granted by the Department. When such capacity was refixed by an order dated 8th February 2000, even then the assessee was not satisfied. This was not just the case of delayed approach to the Tribunal. Essentially, the respondent was challenging fixation of annual production capacity. Part of the request was even granted by the Department. When such capacity was refixed by an order dated 8th February 2000, even then the assessee was not satisfied. This was not just the case of delayed approach to the Tribunal. Essentially, the respondent was challenging fixation of annual production capacity. 7. Both the questions are therefore answered against the Revenue. Tax Appeal is dismissed.