2001 (10) TMI 90 - SC - Central Excise

Summary

Issues involved: Challenge to excise duty charge on notified goods based on production capacity, validity of Rule 96ZO of Central Excise Rules, validity of certain notifications issued by Central Govt.

Excise Duty Charge Issue:
The judgment pertains to a group of cases challenging the excise duty charge on notified goods based on production capacity as per Section 3A of the Central Excise Act, 1944. The validity of Rule 96ZO of the Central Excise Rules was also contested on the grounds of inconsistency with the Act. Various writ petitions were filed in the Delhi High Court, leading to appeals by the Union of India in the Supreme Court.

Validity of Section 3A and Excise Duty Assessment:
The matter was narrowed down to a three-year period as the relevant scheme had been discontinued. Manufacturers' counsels did not contest the validity of Section 3A but proposed excise duty assessment based on actual production for the entire year. The Union of India agreed to assess the duty for the full financial year, resolving any remaining disputes on the issue.

Challenge to Rule 96ZO:
Regarding Rule 96ZO, a manufacturer's counsel argued against a provision in sub-rule 3 which restricted availing benefits under Section 3A(4) if excise duty was paid as per the rule. The Court held that the manufacturer cannot switch between paying based on Rule 96ZO and actual production under Section 3A(4) within the same financial year. Citing a previous decision, the Court clarified that these are alternative procedures, and once chosen, the benefit of one cannot be claimed after opting for the other. Consequently, the controversy was settled, and all cases in the group were disposed of accordingly with costs.