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2015 (11) TMI 1172 - SUPREME COURT

2015 (11) TMI 1172 - SUPREME COURT - 2015 (326) E.L.T. 209 (SC), 2015 (12) JT 355, 2015 (12) SCALE 686, 2016 (3) SCC 643 - Delayed payment of central excise duty under Section 3A of the Central Excise Act, 1944 - Demand of Interest and penalty - Rules 96ZO, 96 ZP and 96 ZQ of the Central Excise Rules, 1994 - violative of Articles 14 and 19(1)(g) of the Constitution - Held that:- When Section 6 speaks of the repeal of any enactment, it refers not merely to the enactment as a whole but also to any .....

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t of duty, which may be in crores of rupees. It is clear that as has been held by this Court, penalty imposable under the aforesaid three Rules is inflexible and mandatory in nature. The High Court is, therefore, correct in saying that an assessee who pays the delayed amount of duty after 100 days is to be on the same footing as an assessee who pays the duty only after one day’s delay and that therefore such rule treats unequals as equals and would, therefore, violate Article 14 of the Constitut .....

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well. - Even where clandestine removal and intent to evade duty are present, yet the authorities are given a discretion to levy a penalty higher than ₹ 10,000/- but not exceeding the duty leviable. In a given case, therefore, even where there is willful intent to evade duty and the duty amount comes to say a crore of rupees, the authorities can in the facts and circumstances of a given case, levy a penalty of say ₹ 25,00,000/- or ₹ 50,00,000/-. This being the position, it i .....

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itself make rules 96ZO, 96 ZP and 96 ZQ without authority of law. We, therefore, uphold the contention of the assessees in all these cases and strike down rules 96ZO, 96 ZP and 96 ZQ insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act. - Load capacity of an induction furnace unit is certainly relevant material referred to in Rule 3(2) to determine the c .....

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APPEAL NO.4281 OF 2007 CIVIL APPEAL NO.4282 OF 2007 CIVIL APPEAL NO.3031 OF 2008 CIVIL APPEAL NO.13601 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.22134 OF 2008) CIVIL APPEAL NO.4379 OF 2010 CIVIL APPEAL NO.13602 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.11030 OF 2010) CIVIL APPEAL NO.908 OF 2011 CIVIL APPEAL NO.5448 OF 2011 CIVIL APPEAL NO.5449 OF 2011 CIVIL APPEAL NO.5452 OF 2011 CIVIL APPEAL NO.5453 OF 2011 CIVIL APPEAL NO.13603 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.5532 OF 2011) CIVIL APPEAL NOS.86 .....

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5 (ARISING OUT OF SLP (CIVIL) NO.19979 OF 2011) CIVIL APPEAL NO.13612 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.19983 OF 2011) CIVIL APPEAL NO.13614 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.20667 OF 2011) CIVIL APPEAL NO.13615 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.21584 OF 2011) CIVIL APPEAL NO.13616 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.25881 OF 2011) CIVIL APPEAL NO.13617 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.1796 OF 2012) CIVIL APPEAL NO.13618 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.16249 OF 201 .....

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T OF SLP (CIVIL) NO.39972 OF 2012) CIVIL APPEAL NOS.13626-13627 OF 2015 (ARISING OUT OF SLP (CIVIL) NOS.1103-1104 OF 2013) CIVIL APPEAL NO.13628 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.4224 OF 2013) CIVIL APPEAL NO.13629 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.5877 OF 2013) CIVIL APPEAL NO.13630 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.7852 OF 2013) CIVIL APPEAL NO.13631 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.9796 OF 2013) CIVIL APPEAL NO.13632 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.11709 OF 2013) C .....

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ARISING OUT OF SLP (CIVIL) NO.1269 OF 2014) CIVIL APPEAL NO. 1979 OF 2014 CIVIL APPEAL NOS.13641-13642 OF 2015 (ARISING OUT OF SLP (CIVIL) NOS.4511-4512 OF 2014) CIVIL APPEAL NO.13643 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.20044 OF 2014) CIVIL APPEAL NO.13644 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.23009 OF 2014) CIVIL APPEAL NO.13645 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.26042 OF 2014) CIVIL APPEAL NO.13646 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.26036 OF 2014) CIVIL APPEAL NO.13647 OF 2015 (ARI .....

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VIL APPEAL NO.13654 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.36408 OF 2014) CIVIL APPEAL NO.13655 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.36413 OF 2014) CIVIL APPEAL NO.13656 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.3486 OF 2015) CIVIL APPEAL NO.13657 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.6147 OF 2015) CIVIL APPEAL NO.13658 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.7820 OF 2015) CIVIL APPEAL NO.13659 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.33041 OF 2013) CIVIL APPEAL NO.13660 OF 2015 (ARISING OUT OF SLP .....

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667 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.27998 OF 2015) CIVIL APPEAL NO.13668 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.28262 OF 2015) CIVIL APPEAL NO.13669 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.27471 OF 2015) CIVIL APPEAL NO.13670 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.27997 OF 2015) CIVIL APPEAL NO.13671 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.28264 OF 2015) CIVIL APPEAL NO.13672 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.28935 OF 2015) CIVIL APPEAL NO.13673 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.2 .....

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the parent provision and violative of Articles 14 and 19(1)(g) of the Constitution. Most of the appeals in this batch are, therefore, by the Union of India. However, before dealing with the said appeals, it is necessary to first segregate Civil Appeal No.4280 of 2007 which raises a slightly different question from the questions raised in the other appeals and decide it first. 3. The question which arises for decision in the said appeal is the demand, by means of a letter dated 19.8.2005, for pay .....

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ppellant surrendered its registration certificate on 1.6.2000. As stated hereinabove, on 19.8.2005 the impugned notice was issued to the appellant demanding interest for delayed payment of duty for the period 1997 to 2000. 5. The High Court framed two questions which arose for its consideration: (1) whether omission of the compounded levy scheme in 2001 wipes out the liability of the assessee for the period during which the scheme was in operation, and (2) whether the letter of demand of interes .....

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, namely, M/s Fibre Boards (P) Ltd., Bangalore v. Commissioner of Income Tax, Bangalore, [2015] 376 ITR 596 (SC), would cover the matter before us being directly against the appellant s case. However, he submitted that for various reasons this judgment requires a relook and ought to be referred to a larger Bench of three Judges. Shri Aggarwal argued the matter with great ability and we listened to him with considerable interest. 8. First, it may be stated that the judgment of this Court in the F .....

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ection 24 of the General Clauses Act, the construction of the said expression in both sections would, therefore, include within it omissions made by the legislature. 9. Shri Aggarwal, however, argued that there is a fundamental distinction between a repeal and an omission in that in the case of a repeal the statute is obliterated from the very beginning whereas in the case of an omission what gets omitted is only from the date of omission and not before. This being the case, it is clear that thi .....

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ction, can be by way of omission, insertion or substitution. Therefore, it is fallacious to state that Section 6A would lead to the conclusion that omissions are included in repeals . He further argued that in any event, the true ratio decidendi of the Constitution Bench decision in Rayala Corporation (P) Ltd. & Ors. v. Director of Enforcement, New Delhi, 1969 (2) SCC 412, is that an omission cannot amount to a repeal inasmuch as the first reason given for distinguishing the Madhya Pradesh H .....

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er referred to Section 31 of the Prevention of Corruption Act, 1988, which, in his opinion, makes it clear that Parliament itself has understood that a repeal under Section 6 of the General Clauses Act would not apply to omissions. He has further argued that it may be true that the expression repeal is normally used when an entire statute is done away with, as opposed to an omission which is applied only when part of the statute is deleted, but said that this is not invariably the case, and refe .....

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e law ought not to be disturbed in the larger public interest. 11. Since Shri Aggarwal has made detailed submissions on why according to him the judgment in the Fibre Board s case is not correctly decided, we propose to deal with each of those submissions in some detail. 12. First and foremost, it is important to refer to the definition of enactment contained in Section 3(19) of the General Clauses Act. The said definition clause states that enactment shall mean the following:- enactment" s .....

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ar, as has been stated by referring to a passage in Halsbury s Laws of England in the Fibre Board s judgment, that the expression omission is nothing but a particular form of words evincing an intention to abrogate an enactment or portion thereof. This is made further clear by the Legal Thesaurus (Deluxe Edition) by William C Burton, 1979 Edition. The expression delete is defined by the Thesaurus as follows: Delete: - Blot out, cancel, censor, cross off, cross out, cut, cut out, dele, discard, d .....

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n, leave out, leave undone, let go, let pass, let slip, miss, neglect, omittere, pass over, praetermittere, skip, slight, transire. And the expression repeal is defined as follows:- Repeal:- Abolish, abrogare, abrogate, annul, avoid, cancel, countermand, declare null and void, delete, eliminate, formally withdraw, invalidate, make void, negate, nullify, obliterate, officially withdraw, override, overrule, quash, recall, render invalid, rescind, rescindere, retract, reverse, revoke, set aside, va .....

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, which the appellant s counsel does not deny, it is clear that a conjoint reading of Halsbury s Laws of England and the Legal Thesaurus cited hereinabove both lead to the same result, namely that an omission being tantamount to a deletion is a form of repeal. 15. Learned counsel s second argument that Section 6A when it speaks of an omission only speaks of an amendment which omits and, therefore does not refer to a repeal is equally fallacious. In Bhagat Ram Sharma v. Union of India, 1988 Supp .....

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the introduction of a new provision. There is no real distinction between 'repeal' and an 'amendment'. In Sutherland's Statutory Construction, 3rd Edn., Vol. 1 at p. 477, the learned author makes the following statement of law: The distinction between repeal and amendment as these terms are used by the Courts is arbitrary. Naturally the use of these terms by the Court is based largely on how the Legislature have developed and applied these terms in labelling their enactments. .....

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nd repeal may differ in kind - addition as opposed to withdrawal or only in degree -abrogation of part of a section as opposed to abrogation of a whole section or Act; or more commonly, in both kind and degree - addition of a provision to a section to replace a provision being abrogated as opposed by abrogation of a whole section of an Act. This arbitrary distinction has been followed by the Courts, and they have developed separate rules of construction for each. However, they have recognised th .....

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als a law and re-enacts it. An amendment of substantive law is not retrospective unless expressly laid down or by necessary' implication inferred. (at para 17 & 18) 16. It is clear, therefore, that when this Court referred to Section 6A in Fibre Board s case and held that Section 6A shows that a repeal can be by way of an express omission, obviously what was meant was that an amendment which repealed a provision could do so by way of an express omission. This being the case, it is clear .....

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Rayala Corporation (P) Ltd. for distinguishing the Madhya Pradesh High Court judgment. Ordinarily, both reasons would form the ratio decidendi for the said decision and both reasons would be binding upon us. But we find that once it is held that Section 6 of the General Clauses Act would itself not apply to a rule which is subordinate legislation as it applies only to a Central Act or Regulation, it would be wholly unnecessary to state that on a construction of the word repeal in Section 6 of th .....

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omission would not be included. We are, therefore, of the view that the second so-called ratio of the Constitution Bench in Rayala Corporation (P) Ltd. cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta. (at para 27) 18. Merely because the Constitution Bench referred to a repeal not amounting to an omission as the first reason given for distinguishing the Madhya Pradesh High Court s judgment would not undo the effect of paragraph 27 of Fibre Board s case w .....

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in Rayala Corporation reads as follows:- In the Defence of India Rules, 1962, rule 132A (relating to prohibition of dealings in foreign exchange) shall be omitted except as respects things done or omitted to be done under that rule. 20. A cursory reading of clause 2 shows that after omitting Rule 132A of the Defence of India Rules, 1962, the provision contains its own saving clause. This being the case, Section 6 can in any case have no application as Section 6 only applies to a Central Act or .....

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General Clauses Act. 21. It was then urged before us that Section 31 of the Prevention of Corruption Act, 1988 would also lead to the conclusion that Parliament itself is cognizant of the fact that an omission cannot amount to a repeal. Section 31 of the Prevention of Corruption Act, 1988, states as follows:- Section 31 - Omission of certain sections of Act 45 of 1860 Sections 161 to 165A (both inclusive) of the Indian Penal Code, 1860 (45 of 1860) shall be omitted, and section 6 of the General .....

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Corporation had stated that an omission would not amount to a repeal and it is for this reason that Section 31 was enacted. This again does not take us further as this statement of the law in Rayala Corporation is no longer the law declared by the Supreme Court after the decision in the Fibre Board s case. This reason therefore again cannot avail the appellant. 23. The reference to the savings provision in Section 1 of the Indian Contract Act again does not take us very much further as the expre .....

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e logic, this Court has laid down the parameters of when it would be expedient to have a relook at a particular decision in the case of Keshav Mills Co. Ltd. v. CIT, Bombay North, 1965 (2) SCR 908, as follows.- In dealing with the question as to whether the earlier decisions of this Court in the New Jehangir Mills [1959]37ITR11(SC) case and the Petlad Co. Ltd. [1963] S.C.R. 871 case should be reconsidered and revised by us, we ought to be clear as to the approach which should be adopted in such .....

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at there are compelling and substantial reasons to do so. It general judicial experience that in matters of law involving question of constructing statutory or constitutional provisions, two views are often reasonably possible and when judicial approach has to make a choice between the two reasonably possible views, the process of decisionmaking is often very difficult and delicate. When this Court hears appeals against decisions of the High Courts and is required to consider the propriety or co .....

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he High Court, this Court would be discharging its duty as Court of Appeal. But different considerations must inevitably arise where a previous decision of this Court has taken a particular view as to the construction of a statutory provision as, for instance, section 66(4) of the Act. When it is urged that the view already taken by this Court should be reviewed and revised, it may not necessarily be an adequate reason for such review and revision to hold that though the earlier view is a reason .....

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vour and concern of this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country. Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable, may incidentally tend to make law uncertain and introduce confusion which must be consistently avoided. That is not to say that if on a subsequent occasion, the Court is satisfied that i .....

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isions. It would always depend upon several relevant considerations:- What is the nature of the infirmity or error on which a plea for review and revision of the earlier view is based? On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the Court not drawn to any relevant and material statutory provision, or was any previous decision of this Court bearing on the point not noticed? Is the Court hearing such plea fairly unanimous that there is .....

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revise its earlier decisions. (at page 921-922) 24. Fibre Board s case is a recent judgment which, as has correctly been argued by Shri Radhakrishnan, learned senior counsel on behalf of the revenue, clarifies the law in holding that an omission would amount to a repeal. The converse view of the law has led to an omitted provision being treated as if it never existed, as Section 6 of the General Clauses Act would not then apply to allow the previous operation of the provision so omitted or anyt .....

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as remained unnoticed. For this reason also we decline to accept Shri Aggarwal s persuasive plea to reconsider the judgment in Fibre Board s case. This being the case, it is clear that on point one the present appeal would have to be dismissed as being concluded by the decision in the Fibre Board s case. 25. Even on the point of limitation, we find that the High Court noticed that the assessee undertook to pay the amount with interest upto 31.3.2003, on which date a last part payment was made. A .....

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point was not raised before any of the authorities below he ought to be allowed to raise it for the first time in this Court not only as it is a pure question of law but also because, according to him, this Court has held that rules which are ultra vires ought to be ignored by the courts even if there is no substantive challenge to them. 27. Shri Radhakrishnan, learned senior advocate appearing for the revenue, strongly contradicts this position and has vehemently argued that since this issue w .....

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llows: RULE 96ZO. Procedure to be followed by the manufacturer of ingots and billets. (3)…….. Provided also that where a manufacturer fails to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, he shall be liable to,- (i) Pay the outstanding amount of duty along with interest thereon at the rate of eighteen per cent. per annum, calculated for the period from the 16th day of such month or the 1st day of next month, as .....

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st thereon at the rate of eighteen per cent. per annum calculated for the period from the 11th day of such month till the date of actual payment of the outstanding amount; and (ii) A penalty equal to the amount of duty outstanding from him at the end of such month or five thousand rupees, whichever is greater. Rule 96ZQ Procedure to be followed by the independent processor of textile fabrics. (5) If an independent processor fails to pay the amount of duty or any part thereof by the date specifie .....

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us the judgment in Bhartidasan University and Another v. All-India Council for Technical Education, 2001 (8) SCC 676, and in particular paragraph 14 thereof which reads as follow:- The fact that the Regulations may have the force of law or when made have to be laid down before the legislature concerned do not confer any more sanctity or immunity as though they are statutory provisions themselves. Consequently, when the power to make Regulations are confined to certain limits and made to flow in .....

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to obviously and patently lack. It would, therefore, be a myth to state that Regulations made under Section 23 of the Act have "Constitutional" and legal status, even unmindful of the fact that anyone or more of them are found to be not consistent with specific provisions of the Act itself. Thus, the Regulations in question, which the AICTE could not have made so as to bind universities/UGC within the confines of the powers conferred upon it, cannot be enforced against or bind an Unive .....

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e mere fact that there is no specific relief sought for to strike down or declare them ultra vires would not stand in the court s way of not enforcing them. We also feel that since this is a question of the very jurisdiction to levy interest and is otherwise covered by a Constitution Bench decision of this Court, it would be a travesty of justice if we would not to allow Shri Aggarwal to make this submission. 30. On merits, the matter is no longer res integra. A Constitution Bench decision of th .....

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e provision in the Act for the levy of interest on arrears of tax that applied to purchases of sugarcane made subsequent to the date of commencement of the amending Act, no interest thereon could be so levied, based on the application of the said Rule 45 or otherwise. 31. Applying the Constitution Bench decision stated above, it will have to be declared that since Section 3A which provides for a separate scheme for availing facilities under a compound levy scheme does not itself provide for the .....

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at the appellants are availing the facilities under the compound levy scheme, which they themselves opted for and filed declarations furnishing details about the annual capacity of production and duty payable on such capacity of production. It has to be taken into consideration that the compounded levy scheme for collection of duty based on annual capacity of production under Section 3 of the Act and the 1997 Rules is a separate scheme from the normal scheme for collection of Central excise duty .....

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concern themselves with penalties that are leviable under Rules 96 ZO, 96 ZP and 96 ZQ. Since the lead judgment is a detailed judgment by a Division Bench of the Gujarat High Court reported in Krishna Processors v. Union of India, 2012 (280) ELT 186 (Guj.) and followed by other High Courts, we will refer only to this decision. 33. On the facts before the Gujarat High Court, there were three civil applications each of which challenged the constitutional validity of the aforesaid rules insofar as .....

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emely difficult to argue that the aforesaid judgment was wrong. He therefore asked us to limit the effect of the judgment when it further held that after omission of the aforesaid Rules with effect from 1.3.2001 no proceedings could have been initiated thereunder. In this submission he is correct for the simple reason that the Gujarat High Court followed Rayala Corporation in holding that omissions would not amount to repeals , which this Court has now clarified is not the correct legal position .....

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saying that an assessee who pays the delayed amount of duty after 100 days is to be on the same footing as an assessee who pays the duty only after one day s delay and that therefore such rule treats unequals as equals and would, therefore, violate Article 14 of the Constitution of India. It is also correct in saying that there may be circumstances of force majeure which may prevent a bonafide assessee from paying the duty in time, and on certain given factual circumstances, despite there being .....

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n on the right to carry on trade or business. Clearly the levy of penalty in these cases of a mandatory nature for even one day s delay, which may be beyond the control of the assessee, would be arbitrary and excessive. In such circumstances, this Court has held in Md. Faruk v. State of M.P., 1970(1) SCR 156: The Court must in considering the validity of the impugned law imposing a prohibition on the carrying on of a business or profession, attempt an evaluation of its direct and immediate impac .....

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gency-national or local-or the necessity to maintain essential supplies, or the necessity to stop activities inherently dangerous, the existence of a machinery to satisfy the administrative authority that no case for imposing the restriction is made out or that a less drastic restriction may ensure the object intended to be achieved. (at page 161) 36. The direct and immediate impact upon the fundamental right of the citizen is that he is exposed to a huge liability by way of penalty for reasons .....

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under this section, the Central Government may provide that any person committing a breach of any rule shall, where no other penalty is provided by this Act, be liable to a penalty not exceeding five thousand rupees. (4) Notwithstanding anything contained in subsection (3), and without prejudice to the provisions of section 9, in making rules under this section, the Central Government may provide that if any anufacturer, producer or licensee of a warehouse - (a) removes any excisable goods in co .....

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the duty leviable on such goods or ten thousand rupees, whichever is greater; 38. Under Section 37(3), the statute itself provides in all cases where no other penalty is provided by the Act that a penalty not exceeding ₹ 5,000/- alone can be levied. Sub- Section(4) is even more telling. Even in cases where there is a clandestine removal of excisable goods, and cases where the assessee intends to evade payment of duty, the assessee is liable to a penalty not exceeding the duty leviable on .....

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is willful intent to evade duty and the duty amount comes to say a crore of rupees, the authorities can in the facts and circumstances of a given case, levy a penalty of say ₹ 25,00,000/- or ₹ 50,00,000/-. This being the position, it is clear that when contrasted with the provisions of the Central Excise Act itself, the penalty provisions contained in Rules 96ZO, 96 ZP and 96 ZQ are both arbitrary and excessive. 39. A penalty can only be levied by authority of statutory law, and Sect .....

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of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act. 40. It now remains to deal with SLP(civil) No.22134 of 2000, (APS Associates v. Commissioner of Central Excise). In this SLP, the Punjab and Haryana High Court has passed a judgment on 20.5.2008 in which it construed Rule 3(2) of the Induction Furnace Annual Capacity Determination Rules, 1997. The said Rule is set out hereinbelow:- 3. The annual capacity of production ref .....

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(1) is not available for any reason with the manufacturer then the Commissioner shall ascertain the capacity of the furnaces installed in the induction furnace unit on the basis of the capacity of comparable furnaces installed in any other factory in respect of which the manufacturer s invoice or other document indicating the capacity of the furnace is available or, if not so possible, on the basis of any other material as may be relevant for this purpose. The Commissioner may, if he so desires, .....

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A.P.S. ASSOCIATES PVT LIMITED, I visited their works at D-133, Phase V. Focal Point. Ludhiana for inspection of the INDUCTION FURNACE and assessing the capacity thereof. The party has ONE FURNACE of following specifications:- MAKE GEC CAPACITY 3200 KG/1600 KW/1200 V. While assessing the capacity of a FURNACE for a particular heat. It may please be noted that besides crucible size, other factors affecting the capacity are as follows: Incoming Power to the crucible from the Power Pack System of t .....

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r allowing for an Aux. load of approximately 125 KW, the load available for melting shall be approximately 1300 KW. As such, the unit shall not be able to utilize the full capacity of the furnace i.e. 1600 KW. 42. The said declaration and Chartered Engineer Certificate have not been accepted by the authorities below, and the High Court rejected it on the footing that Rule 3(2) of the aforesaid Rules did not, in terms, refer to the sanctioned load of electrical units, and therefore this could not .....

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d the interest of Revenue and to arrest evasion of duty. Sub-section (2) of Section 3-A provides for framing of Rules in the matter of determination of the annual capacity. It specifically provides for taking into consideration such factor or factors relevant for annual capacity of production of the factory in which goods are produced. Therefore, relevant factor like power factor is not alien for determination of annual production capacity in terms of Section 3-A of the Act. At this stage it is .....

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s of the capacity of the comparable furnaces available in similar industry. The third contingency is determination of the annual capacity of production of ingots by formula. The formula is ACP = TCF × 3200. ACP is nothing but the annual capacity of production of the factory. TCF is also again referred to the total capacity. Therefore, capacity plays a vital role in terms of levy of excess duty. 12. In the case on hand, the petitioner has sought for an option that the annual capacity is to .....

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