TMI Blog2024 (1) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... n Benches of the Tribunal. Whether it is permissible to ascertain RSP under section 4A in respect of clearances made between 14.05.2003 and 01.03.2008 i.e. between the substitution of sub-section (4) of section 4A and the coming into force of the 2008 Rules? - HELD THAT:- Section 4A was first introduced in 1997. At that time it only provided that the Central Government may, by notification in the official gazette, specify any goods, in relation to which it is required, under the provisions of the 1976 Act, to declare on the package thereof the RSP of such goods, to which the provisions of sub-section (2) shall apply. Section 4A, as it then stood, did not provide for the effect of non-declaration of RSP on the package or wrongful declaration of the RSP or alteration or obliteration of the RSP on the package. The legislature did add sub-section (4) to section 4A in 1999, but this was restricted to confiscation of goods where RSP was not declared on the package or RSP did not constitute the sole consideration for such sale or it was tampered with or altered after removal. The amendment, therefore, did not provide for raising of any demand or ascertainment of the actual RSP in such cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of property tax on capital value will be available on 20.03.2012 and not with any retrospective operation. The decision of the Constitution Bench of the Supreme Court in Mohammad Hussain Gulam Mohammad [ 1961 (5) TMI 59 - SUPREME COURT] , therefore, needs to be considered. Section 11 of the Bombay Agriculture Produce Markets Act 1939 gives power to the Market Committee, subject to the provisions of the rules and subject to such maxima as may be prescribed, to levy fees on the agriculture produce bought and sold by licensee in the market area. The Supreme Court, after noticing that the State Government had not fixed any maxima, held that it would not be permissible for the Market Committee to fix any fees under section 11. In the present case, sub-section (4) of section 4A of the Central Excise Act, as substituted on 14.05.2003, specifically provides that the RSP shall be ascertained in the prescribed manner, which means that rules have to be framed under section 37 of the Central Excise Act. The RSP, therefore, can be determined only in the prescribed manner i.e. in accordance with the procedure prescribed in the rules and by no other manner. As noticed above, the rules were ultima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not provide that they will apply retrospectively. Contrary Views - HELD THAT:- In M/S ACME CERAMICS AND OTHERS VERSUS CCE RAJKOT [ 2014 (3) TMI 164 - CESTAT AHMEDABAD] , the Division Bench held that for the period prior to 01.03.2008, the entire exercise undertaken by the Revenue in determining the RSP, even if RSP is not in accordance with the law, is faulty as the prescribed manner of determination of RSP was brought into statute only from 01.03.2008. The Division Bench further observed that since the Central Government had not framed the rules for determining the RSP in a case where the RSP declared on the package was sought to be rejected, the authorities had no power to determine the RSP - However, in Schneider Electrical the two learned members of the Division Bench hearing the appeal expressed contrary views as a result of which the issue was referred to a learned third member. The learned member (judicial) constituting the Division Bench held that the demands for the period prior to 01.03.2008 would not be sustainable as there was no provision to determine the RSP. The learned member (technical), however, observed that during the period from 14.05.2003 to 01.03.2008 there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which date the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force; (ii) In view of the answer to the first question, there is no necessity of answering the second question; and (iii) It is not necessary to answer the third question as both learned counsel for the appellant and the learned special counsel appearing for the department have stated that this question may not be answered by the Larger Bench. The papers may now be placed before the Division Bench of the Tribunal for deciding the appeal. - HON BLE MR. JUSTICE DILIP GUPTA , PRESIDENT , HON BLE MR. SOMESH ARORA , MEMBER ( JUDICIAL ) And HON BLE MR. C L MAHAR , MEMBER ( TECHNICAL ) Shri Devan Parikh , Senior Advocate , Shri Vipin Jain , Shri Amal Dave , Shri Parth Rachchh , Shri P. D. Rachchh , Shri DK Trivedi , Shri Nirav Shah , Shri Sunil Narwandhar and Ms. Dimple Gohil , Advocates for the Appellants Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istake in the aforesaid order dated 10.01.2019 of the Division Bench, a Division Bench of the Ahemdabad Bench of the Tribunal referred the following additional issue to be decided by the Larger Bench: (3) In the facts and circumstances of the case, if the evidence establishes that the RSP was manipulated fraudulently at the behest of the appellant by any other person, can the liability of duty be fastened on the appellants. 4. Thus, three questions have been referred to the Larger Bench of the Tribunal. 5. The first question that has been referred to the Larger Bench deals with divergent opinions expressed by two Division Benches of the Tribunal and is the main question that needs to be determined. The second question is incidental to the first one, as it would require an answer only if the answer to the first question is in the affirmative. Learned counsel appearing for the appellant and the learned special counsel for the department have very fairly stated that the third question does not arise for consideration and may not be answered. 6. To appreciate the issues that have been raised, it would be appropriate to narrate, in short, the facts and for this purpose the facts of Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounted for in its books of account, wherever it pertained to sale of goods, and consequently, there was no evasion of duty or mis-declaration of value; (ii) Even if the alleged cash amount of Rs. 1.48 crores was added to the sale price of the products realised by cheque, the total was well within the declared MRP on the package and thus, the declared MRP was not false or incorrect and consequently, there was no short payment of duty, leave alone any evasion; (iii) As an example, it was stated that if the MRP of the product declared at the factory gate was Rs. 100, then if a sum of Rs. 20/- received in cash was added to the amount of Rs. 55/- realised in cheque, the total would be Rs. 75/-, which would still be below the declared MRP of Rs. 100/- on the package; and (iv) There was no allegation that the MRP declared on the packages at the time of removal had been either obliterated or tampered or altered, either by the manufacturer or by any of the dealers. 10. After the hearing by the Larger Bench was concluded, Shri P.R.V. Ramanan learned special counsel appearing for the department, in the written submissions, raised a preliminary objection that the present reference should be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l counsel placed reliance upon the decision of the Supreme Court in Trimurthi Fragrances as also upon the Larger Bench decision of the Tribunal in Larsen Toubro. 14. In Trimurthi Fragrances, the Supreme Court observed that the judgment of a Bench of a larger coram would prevail over the judgment of a Bench of lower coram, irrespective of the number of members holding the majority view. The relevant portion of the judgment is reproduced below: 27. The conclusion (1) is that a decision delivered by a Bench of largest strength is binding on any subsequent Bench of lesser or coequal strength. It is the strength of the Bench and not number of Judges who have taken a particular view which is said to be relevant. However, conclusion (2) makes it absolutely clear that a Bench of lesser quorum cannot disagree or dissent from the view of law taken by a Bench of larger quorum. Quorum means the bench strength which was hearing the matter. 28. Thus, it has been rightly concluded that the numerical strength of the Judges taking a particular view is not relevant, but the Bench strength is determinative of the binding nature of the Judgment. 15. In Larsen Toubro, a Larger Bench of the Tribunal hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be considered a Larger Bench of this Tribunal. 18. What, therefore, follows is that even if a third member decides the issue referred to in a case where contrary views are expressed by the two members constituting the Division Bench, the ultimate decision would continue to remain that of the Division Bench of the Tribunal. 19. The preliminary objection raised by the learned special counsel for the department, therefore, cannot be accepted. 20. To appreciate the contentions that have been advanced by the learned counsel appearing for the appellant and the learned special counsel appearing for the respondent, it would be useful to first examine the history of the legislation of section 4A of the Central Excise Act. History of legislation of section 4A As introduced by Finance Act, 1997 4A. Valuation of excisable goods with reference to retail sale price. (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retail sale price of such goods on the packages, or declares a retail sale price which does not constitute the sole consideration for such sale, or tampers with, obliterates or alters any such declaration made on the packages after removal, such goods shall be liable to confiscation. 25. This amendment made in the year 1999 is restricted firstly to permitting only confiscation of goods and does not permit raising of any demand. Secondly, the sub-section still did not provide for ascertainment of the actual RSP. Hence, without ascertaining the actual retail sale price, the new sub-section (4) permitted confiscation of goods in any of the three eventualities referred to above. 26. A further amendment was thereafter made in section 4A in 2003 by substituting the existing sub-section (4). As amended by Finance Act, 2003 27. In section 4A of the Central Excise Act, for sub-section (4), the following shall be substituted, namely:- (4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer (a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-2, specifically provides that if more than one RSP is declared, the maximum shall be deemed to be RSP. It further provides that if the declared RSP is altered to increase the RSP after clearance, such altered RSP shall be deemed to be the RSP for valuation. The section, however, does not itself provide the method of ascertaining the RSP. 29. A plain reading of the aforesaid amended provisions of sub-section (4) of section 4A would reveal that the same applies to the following three situations: (i) When goods are removed from the place of manufacture without declaring the RSP of such goods i.e. a case of non-declaration of RSP; (ii) When a RSP is declared which is not the RSP as required to be declared as per the Standard of Weight and Measures Rules, 1977 framed under the provisions of Standard of Weights and Measures Act, 1976 i.e. a case of wrong declaration of RSP; and (iii) When the declared RSP has been altered, tampered or obliterated after the removal of goods from the place of manufacture i.e. a case of post removal alteration or tampering of RSP. 30. In each of the above three situations, sub-section (4) of section 4A provides for the following two consequences: (a) Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of such higher RSP affixed later on. (b) assume powers to ascertain the RSP of goods having on RSP declared or the declared RSP being tampered with, obliterated or altered; and (c) assume powers to make rules for such ascertainment. For illustration, on an excisable goods covered under RSP based assessment, RSP declared at the time of removal is Rs. 100. However, subsequently after removal of goods from factory of manufacture the RSP declared on package is amended to Rs. 110 for whatever reason. This activity would amount to manufacture and duty would be leviable on the basis of amended RSP. In a case where the manufacturer does not declare RSP or tampers or obliterates it, the proposed amendment will enable the Government to prescribe manner of ascertaining the RSP in such case (Rules for ascertaining RSP) will be prescribed subsequent to enactment of Finance Bill, 2003. CBEC Circular No.B-3/5/2003-TRU dated 30.04.2003 1.2 Clause 129 which seeks to amend section 4A so as to enable the Government to ascertain the retail sale price (RSP), in cases where either RSP is not declared or incorrect RSP is declared, has been amended so as to provide that the RSP in such cases shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and removed identical goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods : (ii) if the retail sale price cannot be ascertained in terms of clause (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture: Provided that if more than one retail sale price is ascertained under clause (i) or clause (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods. Explanation. - For the purposes of this rule, when retail sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample basis. 5. Where a manufacturer alters or tampers the retail sale price declared on the package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then such increased retail sale price shall be taken as the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional liability of duty pursuant to ascertainment would be illegal and in this connection placed reliance upon a Constitution Bench judgment of the Supreme Court in Mohammad Hussain Gulam Mohammad and Another. vs. State of Bombay and another AIR 1962 SC 97 and the judgment of the Supreme Court in Govind Saran Ganga Saran and Larsen Toubro. The view to the contrary taken by the Division Bench in Schneider Electrical is not correct as the judgments of the Supreme Court relied upon in Schneider Electrical have not been properly appreciated; (iii) The contention of the department that the 2008 Rules are procedural in nature and would apply retrospectively is not correct; (iv) The contention of the department that section 4A of section 4 of the Central Excise Act would become redundant is not correct; and (v) The contention of the department that the process of ascertainment under section 4A (4) of the Central Excise Act is not the same as determination of value and being procedural in nature cannot confer any vested right upon an assessee who has mis-declared the RSP, is not correct. 38. Shri P.R.V. Ramanan, learned special counsel appearing for the department made the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arances made between 14.05.2003 and 01.03.2008 i.e. between the substitution of sub-section (4) of section 4A and the coming into force of the 2008 Rules. 41. As noticed above, section 4A was first introduced in 1997. At that time it only provided that the Central Government may, by notification in the official gazette, specify any goods, in relation to which it is required, under the provisions of the 1976 Act, to declare on the package thereof the RSP of such goods, to which the provisions of sub-section (2) shall apply. Section 4A, as it then stood, did not provide for the effect of non-declaration of RSP on the package or wrongful declaration of the RSP or alteration or obliteration of the RSP on the package. The legislature did add sub-section (4) to section 4A in 1999, but this was restricted to confiscation of goods where RSP was not declared on the package or RSP did not constitute the sole consideration for such sale or it was tampered with or altered after removal. The amendment, therefore, did not provide for raising of any demand or ascertainment of the actual RSP in such cases. It was in 2003 that the existing sub-section (4) of section 4A was substituted w.e.f. 14.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r . 45. In this connection, reference can be made to the decision of the Supreme Court in Meera Sahni wherein it was held: 35. It is by now a certain law that an action to be taken in a particular manner as provided by a statute, must be taken, done or performed in the manner prescribed and in no other manner 46. It, therefore, follows that it would be impermissible for any adjudicating authority to ascertain the RSP by any other methodology, for such an ascertainment would not only be contrary to the statutory prescription contained in sub-section (4) of section 4A, but would also amount to substituting the words in the prescribed manner and would have the effect of empowering an adjudicating authority to determine for itself the manner of ascertaining the RSP. 47. The judgment of the Supreme Court in Municipal Corporation of Greater Mumbai needs to be referred to in support of the aforesaid view. The Mumbai Municipal Corporation Act 1888 was amended in 2009. The amended section 140A permitted the Corporation to levy property tax on the basis of capital value of the building. Section 154 (1-A) specifically provided that the capital value of the building shall be fixed by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in this context that the Supreme Court held that the section has to be strictly construed and there has to be a specific provision for levy, for there can be no intendment and nothing can be read or implied. Thus, as the rules did not prescribe the relief at which the fees could be levied and collected from the embarking passengers, the levy and collection of development fees from the passengers would be without authority of law. The Supreme Court laid emphasis on the language used at the rate as may be prescribed and distinguished other judgments where such a language was not used. Paragraph 15 of the judgment of the Supreme Court is reproduced below: 15. Once we hold that the development fees levied under Section 22A is really a cess or a tax for a special purpose, Article 265 of the Constitution which provides that no tax can be levied or collected except by authority of law gets attracted and the decisions of this Court starting from The Trustees of the Port of Madras v. M/s Aminchand Pyarelal Ors . (supra), cited on behalf of the Union of India and DIAL and MIAL on the charges or tariff levied by a service or facility provided are of no assistance in interpreting Section 22A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the rate at which the tax is to be levied is an essential component of a taxing provision and no tax can be levied until the rate is fixed in accordance with the taxing provision. We have, therefore, no doubt in our mind that until the rate of development fees was prescribed by the Rules, as provided in Section 22A of the 1994 Act, development fees could not be levied on the embarking passengers at the two major airports. (emphasis supplied) 49. It needs to be noticed that in the aforesaid judgment, the Supreme Court relied upon the Constitution Bench judgment of the Supreme Court in Mohammad Hussain Gulam Mohammad and the decision of the Supreme Court in Dhrangadhra Chemical Works Ltd. vs. State of Gujarat Ors (1973) 2 SCC 345 . 50. The decision of the Constitution Bench of the Supreme Court in Mohammad Hussain Gulam Mohammad, therefore, needs to be considered. Section 11 of the Bombay Agriculture Produce Markets Act 1939 gives power to the Market Committee, subject to the provisions of the rules and subject to such maxima as may be prescribed, to levy fees on the agriculture produce bought and sold by licensee in the market area. The Supreme Court, after noticing that the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law. 53. The contention of the learned special counsel for the department is that rules are merely procedural in nature and, therefore, can be applied retrospectively with effect from the date sub-section (4) of section 4A was substituted on 14.05.2003. This aspect, therefore, needs to be examined. Procedural 54. The issue as to whether the 2008 Rules are procedural in nature or not assumes importance for the reason that it is only if they are procedural in nature that it can it be contended by the department that the 2008 Rules would apply retrospectively to all proceedings even before the 2008 Rules came into force w.e.f. 01.03.2008. The contention of the department is that though the 2008 Rules may have come into force from 01.03.2008, but they would apply retrospectively to all proceedings after sub-section (4) of section 4A was substituted on 14.05.2003. The contention of the appellant, however, is that the provisions of the 2008 Rules are substantive in nature and, therefore, would apply prospectively. 55. At this stage, distinction between substantive provisions and procedural provisions needs to be understood. 56. The distinction between substantive law and procedural pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation of excisable goods with reference to RSP, but prior to 14.05.2003, section 4A did not provide for determination of RSP and it is for the first time when sub-section (4) of section 4A was substituted on 14.05.2003 that apart from confiscation of goods, the RSP of goods removed under the three conditions enumerated therein could be ascertained in the manner prescribed and the said price would be deemed to be the RSP for the purposes of section 4A. What needs to be noted is that section 4A does not itself provide a method for ascertaining the RSP of the goods as it merely provides that it shall be ascertained in the prescribed manner. Subsequently, the 2008 Rules were framed on 01.03.2008 for determination of the RSP of excisable goods. Rule 3 provides that the RSP of any excisable goods under sub-section (4) of section 4A shall be determined in accordance with the rules, i.e. the 2008 Rules. Rule 4 provides for ascertaining the RSP of the goods. It is, therefore, concerned with the quantification of duty. A rule which prescribes the basis of duty cannot be considered to be merely procedural, more so when under sub-section (4) of section 4A, the RSP that is determined u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure. The procedural aspect of the 102nd Amendment Act and the 105th Amendment Act is only the manner of publication of the lists of SEBCs, whereas the substantive element of the said amendments is identifying and recognizing certain communities as SEBCs. Thus, we see no force in the submission of the appellants that the 105th Amendment Act is clarificatory in nature and has to be given retrospective effect from the date on which the 102nd Amendment Act came into effect. (emphasis supplied) 63. It would also be pertinent to refer to the decision of the Supreme Court in Larsen Toubro. The issue that arose for consideration before the Supreme Court was whether service tax can be levied on indivisible works contracts prior to the introduction of the Finance Act 2007 on 01.06.2007 which expressly makes such works contracts liable to service tax. The Delhi High Court in G.D. Builders vs. Union of India and Anr. 2013 (32) S.T.R. 673 (Del.) had held that service tax can be levied on the service component of any contract involving service with sale of goods and that computation of service component is a matter of detail and not a matter relating to imposition of service tax. It was, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrive at the conclusion that it was an authority for the proposition that a tax is leviable even if no rules are framed for assessment of such tax, which is wholly incorrect. The extracted passage from Mahim Patram s case only referred to rules not being framed under the Central Act and not to rules not being framed at all. *****. 35. The aforesaid finding is in fact contrary to a long line of decisions which have held that where there is no machinery for assessment, the law being vague, it would [not] be open to the assessing authority to arbitrarily assess to tax the subject. ***** 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services. (emphasis supplied) 64. The aforesaid discussion leads to be inevitable conclusion that the 2008 Rules are not procedural in nature. In this view of the matter it is not necessary to examine the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective effect to any rule. The underlying principle is that unlike Sovereign Legislature which has power to enact laws with retrospective operation, authority vested with the power of making subordinate legislation has to act within the limits of its power and cannot transgress the same. The initial difference between subordinate legislation and the statute laws lies in the fact that a subordinate law-making body is bound by the terms of its delegated or derived authority and that Court of law, as a general rule, will not give effect to the rules, thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled. ***** 105.3. This precisely is the principle which applies in construing whether the power which is conferred by Section 8A of the Customs Tariff Act is retrospective. The provisions of sub-sections (3) and (4) of Section 7, which are made applicable by sub-section (2) of Section 8A, are to ensure Parliamentary oversight. But that does not enable the Central Government to exercise the power under section 8A with retrospective effect. 106. In Federation of Indian Minerals Industries vs. Union of India, a three judge Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law, is faulty as the prescribed manner of determination of RSP was brought into statute only from 01.03.2008. The Division Bench further observed that since the Central Government had not framed the rules for determining the RSP in a case where the RSP declared on the package was sought to be rejected, the authorities had no power to determine the RSP. 69. However, in Schneider Electrical the two learned members of the Division Bench hearing the appeal expressed contrary views as a result of which the issue was referred to a learned third member. The learned member (judicial) constituting the Division Bench held that the demands for the period prior to 01.03.2008 would not be sustainable as there was no provision to determine the RSP. The learned member (technical), however, observed that during the period from 14.05.2003 to 01.03.2008 there was no bar in adopting a reasonable/best judgment method to make section 4A operational and that the 2008 Rules merely provided guidelines to the assessing officers. The learned member (technical) placed reliance upon the decision of the Supreme Court in Mahim Patram to support this view and the observations made by the learned member (tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 In the present case, the charging section provides for the levy, the rate of tax is specified in the schedule, the person liable to pay the tax is the manufacturer of the goods under Rule 4 of the Central Excise Rules, 2002 and the measure of tax is defined under Section 4A. Thus, all the core ingredients of the tax system is specified in the law. The Rules 2008 merely provides for ascertainment of the measure of tax in a situation where it is not declared. Therefore, the ratio of these decisions has no application whatsoever to the facts of the present case and the arguments raised by the appellants in this regard have to be rejected. In view of the above, I hold that the demand for the period prior to 1-3-2008 and after 14-5-2003 when the Government acquired the power to frame the Rules is sustainable as MRP of the product can be determined by using reasonable means. 73. It is seen that the learned member (technical) constituting the Division Bench mainly placed reliance upon the decision of the Supreme Court in Mahim Patram and the learned third member to whom the matter was referred mainly placed reliance upon the decision of the Supreme Court in Sharvan Kumar. 74. As notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The Supreme Court examined the scope of rule 1BB of the Wealth Tax Act and found that it was essentially a rule of evidence. The observation are as follows: 8. We may now turn to the scope and content of Rule 1BB. The said Rule merely provides a choice amongst well-known and well-settled modes of valuation. Even in the absence of Rule 1BB it would not have have been objectionable, nor would there be any legal impediment, to adopt the mode of valuation embodied in Rule 1BB namely, the method of capitalisation of income on a number of years' purchase value. The rule was intended to impart uniformity in valuations and to avoid vagaries and disparities resulting from application of different modes of valuation in different cases where the nature of the property is similar. ***** 9. On a consideration of the matter we are persuaded to the view that Rule 1BB is essentially a rule of evidence as to the choice of one of the well accepted methods of evaluation in respect of certain kinds of properties with a view to achieving uniformity in valuation and avoiding disparate valuations resulting from application of different methods of valuation respecting properties of a similar nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ology as provided under Rule 8D was neither a well-known nor well-settled mode of computation. The new mode of computation was brought in place by Rule 8D. No Assessing Officer, even in his imagination could have applied the methodology, which was brought in place by Rule 8D. Thus, retrospective operation of Rule 8D cannot be accepted on the strength of law laid down by this Court in the above case. 47. One of the submissions raised by the learned counsel for the assessee also needs to be noticed. Learned counsel for the assessee submits that it is well settled that subordinate legislation ordinarily is not retrospective unless there are clear indication to the same. Reliance has been placed on judgment of this Court in State of Jharkhand Ors. Vs. Shiv Karampal Sahu, (2009) 11 SCC 453. In para 17 following has been stated: 17. Ordinarily, a subordinate legislation should not be construed to be retrospective in operation. The Circular Letter dated 752003 was given a prospective effect. The father of the respondent died on 1952000. There is nothing to show that even Circular dated 98-2000 had been given retrospective effect. In any view of the matter, as the State of Jharkhand in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts that the valuation of any asset other than cash has to be made subject to the rules and does not contemplate that there shall be rules before an asset can be valued and failure to make rules for valuation of a type of asset cannot therefore affect the vires of Section 7. In Section 22A of the 1994 Act, on the other hand, the levy or development fees was to be at the rate as prescribed by the Rules and hence could not be made without the rules. All other decisions starting from T. Cajee v. U. Jormanik Siem Anr. cited on behalf of the Union of India, DIAL and MIAL on this point are cases where the statutory power could be exercised without the rules or the regulations, whereas the power under Section 22A of the 1994 Act to levy development fees could not be exercised without the rules prescribing the rate at which development fees was to be levied. ( emphasis supplied ) 81. In the present case, the words used in sub-section (4) of section 4A are as may be prescribed and not subject to the rules. The decision of the Supreme Court in Sharvan Kumar would not be applicable and what would be relevant in the present case in the decision of the Supreme Court in Consumer Online Foundatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offending goods. What changed after the coming into force of the 2008 Rules w.e.f. 01.03.2008 is that in addition to the confiscation of goods, the department could also demand and recover additional duty on such goods by ascertaining the RSP. It is, therefore, not possible to accept the contention of the learned special counsel nor is it possible to accept the view taken by the learned third member in Schneider Electrical that absurd consequences would flow if the 2008 Rules are not applied retrospectively or that the executive would be left powerless. 87. Learned special counsel for the department also contended that the process of ascertainment under sub-section (4) of section 4A is not the same as determination of value, and being procedural in nature cannot confer any vested right upon a delinquent assessee who has misdeclared the RSP. 88. The distinction sought to be drawn by the learned special counsel between the two expressions, namely, ascertainment and determination , while advancing the contention that mere ascertainment does not confer any vested right upon a manufacturer who violates sub-section (4) of section 4A, is purely artificial and cannot be accepted. The two e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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