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2017 (6) TMI 1101 - AT - Central ExciseRefund claim - case of appellant is that they were liable to pay duty based on actual production instead of in terms of the actual capacity determined by the Commissioner - Held that - the issue is squarely covered in favour of the Revenue by the decision of Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH Versus M/s DOABA STEEL ROLLING MILLS 2011 (7) TMI 10 - SUPREME COURT OF INDIA , where it was held that Section 3A of the Act is an exception to Section 3 of the Act - the charging Section and being in nature of a non obstante provision, the provisions contained in the said Section override those of Section 3 of the Act. Rule 3 of 1997 Rules framed in terms of Section 3A(2) of the Act lays down the procedure for determining the annual capacity of production of the factory. It was further held that intention of Legislature is primarily to be gathered from the words used in statute. Assessee once shown to be falling within letter of law, he must be taxed however, great hardship it may appear to the judicial mind - appeal dismissed - decided against appellant.
Issues:
- Appeal against Commissioner (A) order allowing department appeal and setting aside Order-in-Original. - Interpretation of Section 3A(4) of Central Excise Act, 1944 for determination of duty liability. - Conflict between statutory provisions and subordinate legislation. - Application of Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997. - Impact of Supreme Court judgments on duty payment based on actual production. Analysis: 1. The appeal was filed against the Commissioner (A) order, which set aside the Order-in-Original and allowed the department's appeal. The appellant, engaged in manufacturing hot re-rolled steel products, was covered under Section 3A of the Central Excise Act, 1944, for duty payment based on annual production capacity determined by the Commissioner as per Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997. The dispute arose when the appellants, due to operational constraints, could only work for a limited period, leading to a claim for refund based on actual production versus capacity determined by the Commissioner. 2. The appellant argued that Section 3A(4) of the Central Excise Act allows for duty determination based on actual production, even if the assessee opted for annual capacity basis payment. They contended that subordinate legislation like Rule 96ZP of the Central Excise Rules, 1944, cannot override statutory provisions. The appellant emphasized that any conflict between statute and rules should be resolved in favor of the statute, as rules cannot curtail benefits provided under statutory provisions. 3. On the other hand, the Revenue relied on the Supreme Court decision in Commissioner of Central Excise, Chandigarh Vs. Doaba Steel Rolling Mills, which upheld the application of Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 for determining annual production capacity. The Revenue pointed out that a review petition against this decision was also dismissed by the Supreme Court, reinforcing the applicability of the Rules in determining duty liability. 4. The Tribunal, after considering arguments from both sides and the Supreme Court's decision, upheld the Revenue's position. Citing the Supreme Court's observation that the intention of the Legislature must be derived from the statute's language, the Tribunal ruled in favor of the Revenue. The Tribunal concluded that the issue was settled by the Supreme Court's decision, and there was no infirmity in the impugned order, thereby dismissing the appellant's appeal. In conclusion, the Tribunal's decision aligned with the Supreme Court's interpretation of the statutory provisions and subordinate legislation, emphasizing the importance of following the law as laid down by higher judicial authorities.
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