2016 (9) TMI 321 - HC - Central Excise

Validity of Rule 8(3A) of Central Excise Rules, 2002 and notices issued under aforesaid provision - Held that - 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 Limited Vs. Union of India 2014 (12) TMI 585 - GUJARAT HIGH COURT . Madras High Court has done so in Malladi Drugs and Pharmaceuticals Limited Vs. Union of India 2015 (5) TMI 603 - MADRAS HIGH COURT and Punjab and Haryana High Court has also taken the same view in Sandley Industries Vs. Union of India 2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT . Therefore, by relying on the aforesaid judgments and for the reasons given therein and on the grounds whereupon the aforesaid provision has been struck down, Rule 8(3A) of Rules 2002 is declared violative of Article 14 of Constitution and as a result thereof, impugned notices dated 26.10.2010, 24.11.2010 and 20.12.2010 which have been issued under the aforesaid provision, are also set aside. - Decided in favour of appellant

Summary

Issues:
Challenge to the validity of Rule 8(3A) of Central Excise Rules, 2002 and the notices issued under the provision.

Analysis:
The judgment delivered by the High Court addressed the challenge to the validity of Rule 8(3A) of the Central Excise Rules, 2002, along with the notices issued by authorities under this provision. It was noted that three different High Courts in the country had previously declared Rule 8(3A) as ultra vires of the Constitution, citing reasons such as being unreasonable, irrational, arbitrary, and violative of Article 14 of the Constitution. Specifically, the Gujarat High Court, Madras High Court, and Punjab and Haryana High Court had all struck down Rule 8(3A) in separate cases. The learned Additional Solicitor General acknowledged the pending appeals before the Apex Court related to these matters but did not present any arguments to support a different view. Consequently, the High Court, relying on the aforementioned judgments and the grounds for declaring the provision unconstitutional, declared Rule 8(3A) of the Central Excise Rules, 2002 as violative of Article 14 of the Constitution. As a result, the impugned notices issued under this provision were set aside, leading to the allowance of the writ petition challenging the validity of the rule and notices.