2000 (4) TMI 37 - SUPREME COURT

Whether there is any conflict between the provisions of sub-section (4) of Section 3A of the Act and sub-rule (3) of Rule 96ZO of the Central Excise Rules?

Whether a manufacturer who has exercised the option to make payment of amount based on total furnace capacity installed in his factory under sub-rule (3) of Rule 96ZO and not on the basis of annual capacity of production can make an application for determining the actual production during the period his aforesaid option is in operation ?

Held that:- What can be seen is that the charge under the Section is clearly on production of the goods but the measure of tax is dependent on either actual production of goods or on some other basis. The incidence of tax is, therefore, on the production of goods. It cannot be said that collection of tax based on the annual furnace capacity is not relatable to the production of goods and does not carry the purpose of the Act. In holding whether a relevant rule to be ultra vires it becomes necessary to take into consideration the purpose of the enactment as a whole, starting from the preamble to the last provision thereto. If the entire enactment is read as a whole indicates the purpose and that purpose is carried out by the rules, the same cannot be stated to be ultra vires of the provisions of the enactment. Therefore, it is made clear that the manufacturers, if they have availed of the procedure under Rule 96ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Act which is specifically excluded.

.On the reasoning adopted by us and bearing in mind that in taxation measures composition schemes are not unknown and when such scheme is availed of by the assessee it is not at all permissible for him to turn around and ask for regular assessment, we think, there is no substance in the contention urged on behalf of the respondents. Appeal allowed.