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2018 (8) TMI 400 - AT - Central ExciseFinalization of provisional duty - Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 - N/N. 42/98-CE (NT), dated 10.12.1998 - Held that - It is a fact that the ACD Rules were held ultra vires by the Madras High Court in the case of BEAUTY DYERS VERSUS UNION OF INDIA 2001 (12) TMI 95 - HIGH COURT OF JUDICATURE AT MADRAS , and, therefore, findings recorded by the Commissioner against the assessee become irrelevant. It is not in dispute that the ACD Rules have been struck down by High Court as ultra vires. The rules, therefore, should be held to have been suffering from the vice of illegality and unconstitutionality right from the date on which they were made. If that be so, the appellant cannot be held to have been lawfully working under the Compounded Levy Scheme. It will follow that determination of ACD by the Commissioner and the procedural laid down for the matters such as determination of duty, liability, collection of duty, abatement of duty, etc. were all futile exercise. It would suffice to say that order or ld. Commissioner (Appeals) inconsequential. Appeal allowed - decided in favor of appellant.
Issues:
1. Confirmation of demand under Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. 2. Legality of Notification No. 42/98-CE(NT) dated 10.12.1998. 3. Jurisdiction of the Commissioner under Section 3A. 4. Applicability of the Compounded Levy Scheme. 5. Validity of the order-in-original. Analysis: Confirmation of Demand under ACD Rules: The appeal was filed against the Order-in-Original confirming demand under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The provisional duty was initially set at &8377; 1.5 lakhs P.M. and later finalized at &8377; 8.61 lakhs P.M. based on the number of Chambers. The appellant argued that a previous judgment declared the relevant notification ultra vires, rendering the order inconsequential. Legality of Notification No. 42/98-CE(NT): The appellant cited precedents where the Hon'ble Madras High Court declared Notification No. 42/98-CE(NT) dated 10.12.1998 as ultra vires. The Commissioner's jurisdiction was questioned due to the omission of Section 3A without a saving clause. The Tribunal acknowledged the High Court's decision, deeming the ACD Rules illegal and unconstitutional from their inception, thereby invalidating the Commissioner's findings and procedures. Jurisdiction of the Commissioner: The Commissioner's jurisdiction was disputed based on the absence of Section 3A post its omission without a saving clause. Citing relevant case law, it was argued that the Commissioner lacked jurisdiction at the time of passing the order, leading to the proceedings lapsing. Applicability of the Compounded Levy Scheme: The Tribunal emphasized that the appellant could not be considered lawfully operating under the Compounded Levy Scheme due to the illegality of the ACD Rules. Consequently, all actions taken by the Commissioner, including duty determinations, were deemed futile, making the order-in-original inconsequential. Validity of the Order-in-Original: Considering the precedential value of the High Court's judgment declaring the ACD Rules ultra vires, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The Tribunal concluded that the appellant could not be held liable under the invalidated ACD Rules, rendering the order irrelevant. This detailed analysis encapsulates the key legal issues addressed in the judgment, highlighting the Tribunal's decision based on the arguments presented by the parties and the legal precedents cited.
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