TMI Blog2011 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. - Decided in favor of revenue. - 3400 OF 2003, 8342-8344 OF 2004, 8345 OF 2004 & 4992-4993 OF 2011 - - - Dated:- 6-7-2011 - D.K. JAIN, H.L. DATTU, JJ. J U D G M E N T D.K. JAIN, J.: 1. Leave granted in SLP (C) Nos. 35323-35324 of 2010. 2. This batch of appeals, by grant of leave, arises out of judgements and orders dated 17th October 2001 in C.C.E.S.No.4 of 2001, 21st October, 2003 in C.E.C. 11, 12, 13 of 2003 and C.E.C. No.122 of 2003 passed by the High Court of Punjab Haryana; 6th November 2009 in Review application No.29356 of 2008 and 8th July 2010 in C.E. Reference application No.113 of 2000 both passed by the High Court of Judicature at Allahabad. By theimpugned judgements, in the main reference applications, filed by the Commissioner of Central Excise, under Section 35H of the Central Excise Act, 1944 (for short "the Act"), the questions referred by the Customs, Excise and Gold (Control) Appellate Tribunal, as it then existed, (for short "the Tribunal") have been answered in favour of the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production: Provided further that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be re-determined on a proportionate basis having regard to such alteration or modification. ............................................................................" 5. It is clear from a bare reading of the Section that the reason which persuaded the Legislature to introduce this provision was attributed to large scale evasion of payment of Excise duty by certain sectors. Thus, the insertion of the Section in the Act was with a view to safeguard the interest of revenue in the sectors, like induction furnaces, steel re-rolling mills etc., where evasion of Excise duty on goods produced in such mills was rampant. The provision authorises the Central Government to noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er) with a copy to the Assistant Commissioner of Central Excise: (2) on receipt of the information referred to in sub-rule (1), the Commissioner shall take necessary action to verify their correctness and ascertain the correct value of each of the parameters. The Commissioner may, if so desires, consult any technical authority for this purpose; (3) the annual capacity of production of hot re-rolled products of non-alloy steel in respect of such factory shall be deemed to be as determined by applying the following formula :- Annual Capacity =1.885 x 10-4 x d x n x i x e x w x Number of utilised hours (in metric tonnes) Where : d = Nominal diameter of the finishing mill in millimetres n = Nominal revolutions per minute (RPM) of the drive i = Reduction ratio of the gear box w =Weight in Kilogramme per metre of the re-rolled product. value of `e' in the formula shall be deemed to be 0.30 in case of low speed mills, and 0.75 in case of high speed mills the value of `w' factor in the formula for the high speed mills shall be deemed to be 0.45 and for the low speed mills shall be deemed to be as under, - ................................................. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial year 1996-97." 8. The respondent-assessee is engaged in the manufacture of hot re-rolled steel products of non-alloy steel in a hot steel rolling mill, classifiable under Chapter 72 of the Central Excise Tariff Act, 1944, for the purpose of levy of Excise duty etc. On 5th January, 1998 the Commissioner, Central Excise, Chandigarh determined the annual capacity of production of the respondent at 7683.753 MT, as per the formula laid down in sub-section (3) of Rule 3 of 1997 Rules. However, keeping in view Rule 5, the annual capacity was finally fixed at 11961.135 MT on the basis of actual production of the mill during the financial year 1996-97. 9. Vide letter dated 13th September, 1999, the respondent requested the Commissioner for re-determination of annual production capacity of their unit in terms of Rule 4(2) of the 1997 Rules on the ground that they have changed some of the parameters of their mill. The request was acceded to and vide order dated 27th January 2000, the Commissioner, applying the formula as laid down under Rule 3(3), determined the annual capacity of the mill at 7328.435 MT but relying on Rule 5, he again computed the annual capacity at 11961.135 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he actual annual production determined initially as per the formula laid down in Rule 3(3) had worked out to 7638.753 MT, which on change in parameters now worked out at 7328.435 MT i.e. a difference approx. 300 MT only. 12.Hence, the Commissioner has preferred the present appeals against the orders of the High Courts, noted in para 2 (supra) 13. Mr. B. Bhattacharya, learned Additional Solicitor General of India, appearing for the revenue, had strenuously urged that the view taken by the High Court to the effect that once the technical parameters, as stipulated in Rule 3(3) of the 1997 Rules, are altered in terms of Rule 4(2) of the said Rules, resulting in reduction in the production capacity, Rule 5 cannot be invoked, is clearly fallacious. According to the learned counsel, for the purpose of Rule 4(2), the production capacity of the rolling mill has to be determined under the said Rule 3(3) as there is no other rule to take care of such a situation. It was argued that when the production capacity of a factory is to be determined under the said Rule, Rule 5 will automatically come into play. Relying on the clarification issued by the Board vide Circular dated 26th Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Excise in terms of Rule 4(2) of the said Rules? 17. Before addressing the contentions advanced by learned counsel for the parties, it is essential to note at the outset that in all these appeals, there is no challenge to the validity of Rule 5 of the 1997 Rules, inserted vide Notification dated 30th August, 1997 and, therefore, we are only required to interpret it and examine the width of its application. 18. As noted above, Section 3A was inserted in the Act to enable the Central Government to levy Excise duty on manufacture or production of certain notified goods on the basis of annual capacity of production to be determined by the Commissioner of Central Excise in terms of the Rules to be framed by the Central Government. Section 3A of the Act is an exception to Section 3 of the Act - the charging Section and being in nature of a non obstante provision, the provisions contained in the said Section override those of Section 3 of the Act. Rule 3 of 1997 Rules framed in terms of Section 3A(2) of the Act lays down the procedure for determining the annual capacity of production of the factory. Sub-rule (3) of that Rule contains a specific formula for determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a number of decisions of this Court: "....in a taxing act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 21. In Commissioner of Sales Tax, Uttar Pradesh Vs. The Modi Sugar Mills Ltd. (1961) 2 SCR 189 , J.C. Shah, J. observed thus: "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency." 22. In Mathuram Agrawal Vs. State of Madhya Pradesh (1999) 8 SCC 667 , D.P. Mohapatra, J. speaking for the Constitution Bench, stated the law on the point in the following terms: "The intention of the legislature in a taxation statute is to be gathered from the language of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
