9911796707
TMI Blog2022 (12) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... ons stated in the accompanying affidavit, it is prayed that this Hon'ble Court may be pleased to issue a writ, direction or order especially in the nature of mandamus declaring the provisions of Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 as ultra vires the provisions of Section 3A of the Central Excise and Salt Act, 1944, and also as unconstitutional, arbitrary and violative of Article 14 of the Constitution of India and pass such other order or orders as are deemed fit and proper in the circumstances of the case. 3. The case was admitted for hearing on 05.02.1999 whereafter counter affidavit has been filed by the respondents. 4. It has been brought to the notice of this Court that the issue involved in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two Rules come into play after the Commissioner of Central Excise determines the annual capacity of the factory or mills manufacturing ingots or billets and hot re-rolled steel products under Section 3A of the Act read with the relevant annual capacity determination rules. Rules 96ZO and 96ZP proceed to lay down the manner of payment of duty, claim for abatement non-payment, payment of interest/penalty and such other incidental matters. Rule 96ZO classifies the manufacturers into two classes, those whose furnace capacity is 3 tonnes and other manufacturers with high capacity of furnaces. The rate of duty payable, except for period from 1-1-1997 to 31-3-1998 which was the transitional period, is Rs. 750/- per tonne, at the time of clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the procedure adopted obviates determination of production. In the absence of determination of production the question of its determination on the basis of actual production as detailed in Section 3A(4) of the Act does not arise. 10. The schemes contained in Section 3A(4) of the Act and Rule 96ZO(3) or Rule 96ZP(3) of the Excise Rules are two alternative procedures to be adopted at the option of the assessee. Thus the two procedures do not clash with each other. If the assessee opts for procedure under Rule 96ZO(1) he may opt out of the procedure under Rule 96Z0(3) for a subsequent period and seek the determination of annual capacity of production. An assessee cannot have a hybrid procedure of combining the procedure under Rule 96ZO(1) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act in relation to special mode of collection of tax or excise duty on timber dealers or other enactments have no relevance. 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 there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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