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2021 (10) TMI 988 - SC - Central ExciseVires of Rule 17(2) of the Pan Masala Rules as ultra vires to the provisions of Section 3A of the Central Excise Act - HELD THAT - It is true that, the High Court has observed that, in the facts of the case, challenge to the vires of Rule 17(2) of the Pan Masala Rules is rather without substance, however, the High Court has not at all addressed the issue on vires on merits in detail. The question of vires cannot be decided by the Appellate Authority/Tribunal in an appeal against the order-in-original. Under the circumstances, the High Court has not at all addressed on merits on the question with respect to vires of Rule 17(2) of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, the impugned order passed by the High Court is set aside and matter remanded to the High Court for its fresh decision - appeal allowed by way of remand.
Issues involved:
Challenge to vires of Rule 17(2) of the Pan Masala Rules as ultra vires to the provisions of Section 3A of the Central Excise Act. Analysis: The Supreme Court heard the appeal where the petitioner challenged the impugned judgment and order of the High Court dated 8-12-2020. The High Court had dismissed the Writ Petition, directing the appellant to pursue an alternative remedy of appeal against the order-in-original dated 21-8-2013. The petitioner disputed the vires of Rule 17(2) of the Pan Masala Rules as ultra vires to the provisions of Section 3A of the Central Excise Act in the original Writ Petition. Although the High Court observed that the challenge to the vires of the rule was without substance, it did not delve into the merits of the vires issue. The Supreme Court held that the Appellate Authority/Tribunal cannot decide the vires issue in an appeal against the order-in-original. Consequently, the Supreme Court set aside the High Court's order and remanded the matter for a fresh decision. The Court clarified that there was a stay on penalty only, and the Department could proceed with the recovery of duty and interest in accordance with the law. The appeal was disposed of, and the Contempt Petition and pending applications were also dismissed or disposed of.
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