2000 (8) TMI 112 - AT - Central Excise

Summary

Issues:
- Conflict between sub-section (4) of section 3A of the Central Excise Act and sub-rule (3) of Rules 96-ZO of the Central Excise Rules.
- Whether a manufacturer can apply for determining actual production while paying based on total furnace capacity.

Analysis:
1. The case involved a reference to the Larger Bench of the Appellate Tribunal CEGAT regarding the conflict between the provisions of sub-section (4) of section 3A of the Central Excise Act and sub-rule (3) of Rules 96-ZO of the Central Excise Rules. The Tribunal considered the decision of the Supreme Court in the case of C.C.E. v. Venus Castings Ltd., which provided clarity on the matter. The Supreme Court highlighted the procedures under Rule 96-ZO for payment of duty based on furnace capacity and the determination of annual production capacity under Section 3A(4) of the Act. The Court emphasized that the two procedures are alternative and cannot be combined into a hybrid method. Manufacturers opting for the composite scheme under Rule 96-ZO cannot claim abatement and must adhere to the payment structure outlined in the rule.

2. The Supreme Court's decision further clarified that the levy of tax under Section 3A of the Act is based on the production of goods, whether on actual production or another basis. The Court rejected the argument that Rule 96-ZO(3) contradicts Section 3A(4) and held that the purpose of the enactment, as a whole, supports the rules' validity. Manufacturers who choose the procedure under Rule 96-ZO(3) cannot seek the benefit of determining production capacity under Section 3A(4), as it is explicitly excluded. The Court supported the views of certain High Courts, overruling conflicting opinions.

3. The Tribunal, based on the Supreme Court's decision, returned the reference to the Division Bench for appropriate orders in individual appeals. The Tribunal acknowledged that cases remitted by the Supreme Court, including those involving similar issues, are pending for final disposal. It directed the Registry to prioritize these appeals for early resolution, given the settled nature of the issues following the Supreme Court's judgment. The reference and appeals were disposed of accordingly.