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TMI Blog1999 (1) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... nt their case by furnishing figures of actual production and also for passing speaking order in accordance with law, since the parties have pleaded before the Tribunal that no opportunity was given before determining the annual capacity or production and actual production was not determined as envisaged under sub-section (4) of Section 3A of the Central Excise Act, 1944. Sub-section (4) of Section 3A of the Central Excise Act is as under :- Where an assessee claims that the actual production of notified goods in his factory is lower than the production determined under sub-section (2), the Commissioner of Central Excise shall after giving an opportunity to the assessee to produce evidence in support of his claim, determine the actual production and redetermine the amount of duty payable by the assessee with reference to such actual production at the rate specified in sub-section (3) . 3. On remand the Commissioner in the impugned order of Appeal E/3229/98-NB filed by M/s. Minakshi Castings observed that, however, no figures of actual production have been supplied by the assessee in any of the submissions made by them. Even otherwise the assessee has opted for payment of duty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Circular issued by Central Board of Excise and Customs under Section 37B of Central Excise Act, 1944 being contrary to decision rendered by Tribunal, not valid and liable to be quashed. When the CBE C does not agree with the decision of Tribunal matter can be taken in the appeal, but instead of filing the appeal Board cannot issue circular to make the order of the Tribunal nugatory. He also submitted that the Commissioner grossly erred in observing that no figures of actual production all have been supplied, but in fact the figures were very much before them and in this context he drew our attention to Annexure-10 page 66 of the paper book to show that the figures for determination of actual production in terms of Section 3A(4) of the Act was very much before the adjudicating authority. 7. He contended that Rule cannot over-ride section. He submitted that Rules are subordinate legislation having been framed under the Act and if there is conflict between Rule and Section to prevail and in support of his contention he referred to the following decisions :- 1. Fabril Gasosa v. U.O.I. - 1997 (96) E.L.T. 241 (Bom.) = 1997 (72) ECR-545 (Bom.) 2. U.O.I. v. Somasundaram - AIR 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity as 1 M.T. there was no need for the Commissioner to ascertain the position by an alternate method provided under sub-rule (2) of Rule 3. If the Commissioner was not for any reason satisfied with the certificate and other evidences brought before him by the applicants, he should have recorded the reasons for rejecting the same and for making a further enquiry as provided under Rule 3(2). 10. Shri Sanjeev Srivastava, learned JDR appearing for the Revenue attempted to convince us that the Commissioner has not flouted the directions of the Tribunal on remand. He said that matters were remanded for de novo consideration and to pass an order on following the Principles of natural justice and it was done accordingly. Irrespective of the fact that the figures were furnished for redetermination of actual production in terms of Section 3A(4), the Commissioner was Justified in holding that the benefit of sub-section (4) of Section 3A cannot be extended to the party since the party has opted for payment of duty under Rule 96ZO(3). Rule 96ZO(3) is as under :- Notwithstanding anything contained elsewhere in these rules, if a manufacturer having a total furnace capacity of 3 metric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d v. Union of India [1995 (79) E.L.T. 367 (Guj.)] 2. M/s. Engineering Systems (P) Ltd. v. Union of India [1992 (57) E.L.T. 12 (Kar.)] 3. M/s. Twincity Glass Private Ltd. v. Union of India [1992 (61) E.L.T. 440 (Bom.)] 4. M/s Gwalior Rayon Mfg. (Wvg.) Co. v. Union of India others [1982 (10) E.L.T. 844 (M.P.) and Miscellaneous Order No. 128/98-B1, dated 8-10-1998 in Appeal No. E/2106/85-C Appeal No. E/660/85-B1 in the case of Balaji Paper Board Pvt. Ltd. and Others. He also justified the action of the Commissioner in determining the annual production capacity of furnace based upon the measurement of the furnace and technical data in terms of Induction Furnace Annual Determination Rule, 1997. He said that any interpretation to promote tax evasion is not permissible and statute should be so construed as to disfavour tax evading measure adopted by the assessee and Rule to be interpreted in such manner relying upon the ratio of the decision in the case of M/s McDowell and Co. Ltd. v. Commercial Tax Officer reported in 1985 (3) SCC 230. 13. We have carefully considered the matter. As can be seen from the respective impugned orders, it is clear that the Commissioner has bypass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section. The relief or right granted under the Section cannot be taken away by Rule. In the instant case Rule curtails the right provided in the Section. The case law cited by the DR did not give any ruling that even conflict if any, in between section and Rule, Rule is to be preferred. None of the cases cited by him dealt with the issue in which there was a conflict in between Section and Rule. In fact in the case of M/s. Twincity Glass Pvt. Ltd. referred to above by the DR it was observed that Rules framed in exercise of statutory power become a part of the Act itself unless found to be in conflict with statutory Rules. This is a case where there is clear conflict in between Section and Rule. In a way sub-section (4) of Section 3A acts as the Review in the limited sense with reference to the determination of annual capacity of production in sub-section (2) of 3A. Sub-section (2) of Section 3A provides the Commissioner of Central Excise to determine of the annual capacity of production after taking such factors relevant to the annual capacity of production. Subsequently if the assessee claims that the actual production is lower than the production determined under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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