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2016 (8) TMI 1438 - HC - Central ExciseConstitutional validity of Rule 8(3A) of Central Excise Rules, 2002 - bar on utilization of CENVAT Credit - Rule 25 of Central Excise Rules, 2002 - HELD THAT - The three different High Courts of the country have already declared Rule 8(3A) of Rules, 2002 ultra vires of Constitution being unreasonable, irrational, arbitrary and violative of Article 14 of Constitution. Gujarat High Court has struck down the aforesaid Rule in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 2014 (12) TMI 585 - GUJARAT HIGH COURT - Madras High Court has done so in M/S. MALLADI DRUGS PHARMACEUTICALS LTD. VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CENTRAL EXCISE 2015 (5) TMI 603 - MADRAS HIGH COURT and Punjab and Haryana High Court has also taken the same view in M/S SANDLEY INDUSTRIES VERSUS UNION OF INDIA AND OTHERS 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT . Rule 8(3A) of Rules 2002 is declared violative of Article 14 of Constitution - impugned order set aside - petition allowed.
Issues: Validity of Rule 8(3A) of Central Excise Rules, 2002
In this judgment by the High Court, the petitioners challenged the validity of Rule 8(3A) of the Central Excise Rules, 2002. The petitioners specifically focused on Rule 8(3A) and not Rule 25 of the same Rules. The court noted that Rule 8(3A) had been declared ultra vires of the Constitution by three different High Courts in the country - Gujarat High Court, Madras High Court, and Punjab and Haryana High Court. The rule was found to be unreasonable, irrational, arbitrary, and violative of Article 14 of the Constitution. The Additional Solicitor General acknowledged the pending appeals in the Apex Court regarding the matter but failed to present any argument to support a different view. Relying on the judgments of the aforementioned High Courts and the grounds for striking down the provision, the High Court declared Rule 8(3A) of the Central Excise Rules, 2002, as violative of Article 14 of the Constitution and set aside the impugned order dated 21-4-2006. Consequently, the writ petition was allowed.
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