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TMI Blog2018 (5) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the furnaces, order dated 9-3-1998 was passed. The aforesaid order was upheld by the Tribunal and it has been held by the Tribunal that in case of the closure of the furnaces for continuation but not less than seven days as per paragraph 6(3) of the instructions, the appellant shall be entitled to abatement in the duty. In case the furnaces of the appellant were not functional, the appellant would be entitled to seek abatement of the duty from the authorities. Appeal dismissed. - LPAOW No. 78 of 2010 and MP No. 113 of 2010 - - - Dated:- 10-8-2017 - Alok Aradhe and Sanjeev Kumar, JJ. Shri Sunil Sethi, Sr. Advocate with Y.E. Tak, Advocate, for the Appellant. Shri Ajay Sharma, Sr. Standing Counsel, for the Respondent. ORDER [Order per : Alok Aradhe, J.]. - In this Intra Court Appeal, the appellant has assailed the validity of order dated 8-10-2010 passed by the learned Single Judge, by which the writ petition preferred by the appellant has been dismissed and the plea of appellant that Rule 96ZO(3) of the Central Excise Rules, 1944 (hereinafter referred to as the Rules of 1944) and Section [3A] of the Central Excise Act, 1944 be held ultra vires the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. The appellant filed reply to the show cause notice on 11-12-2001. The Commissioner of Central Excise vide order dated 26-2-2002 adjudicated the annual capacity of production of the unit as 22400 MT with effect from 1-10-1999 and further directed the appellant to discharge the duty liability for the period from 1-10-1999 to 31-3-2000 in terms of Rule 96ZO(3) of the Rules of 1944. Being aggrieved, the assessee filed an appeal before the Customs Excise and Gold (Control) Appellate Tribunal (herein after referred to as the Tribunal), which vide order dated 1-1-2003 upheld the order passed by the Commissioner of Central Excise. 5. The appellant thereupon assailed the validity of the aforesaid order in OWP No. 72/2003, by which quashment of orders dated 26-2-2002 and 1-1-2003 passed by the Commissioner of Central Excise and the Tribunal respectively was sought. The appellant also sought relief that the Rule 96ZO(3) of the Rules as well as Section 3A of the Act be declared ultra vires the Constitution. The learned Single Judge vide order dated 8-10-2010 inter alia held that in terms of Rule 4 of Rules of 1997, the capacity of production for any part of the year or for any change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectric load of 2 MVA, therefore, it was not possible to run two furnaces simultaneously. It is also urged that every furnace has two crucibles and from the communication as well as punchnama prepared by the officers of the respondents, it is evident that one furnace was sealed by the officer of the respondents. It is submitted that the case of the appellant as well as Yumna Alloys are similar and liability in case of Yumna Alloys is decided by taking into account annual capacity of furnace only, therefore, the appellant is also entitled to parity and the capacity of the appellant ought to have been determined at 4 MT. Lastly, it is urged that validity of Rule 96ZP has been referred to for consideration to the Larger Bench of the Supreme Court. However, the issue with regard to validity of Rule 96ZO(3) as well as Section 3A of the Act was not raised by the learned senior counsel. 7. On the other hand, learned counsel for the Revenue has submitted that once the appellant opts payment under Rule 96ZO(3), he cannot avail Section 3(4) of the Act. It is also submitted that the issue of effect of omission of provision has already been settled by the Supreme Court as well as by this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section. (2) Where a notification is issued under sub-section (1), the Central Government may, by rules, provide for determination of the annual capacity of production, or such factor or factors relevant to the annual capacity of production of the factory in which such goods are produced, by the Commissioner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory : Provided that where a factory producing notified goods is in operation only during a part of the year, the production thereof shall be calculated on proportionate basis of the annual capacity of production : (3) The duty of excise on notified goods shall be levied, at such rate as the Central Government may, by notification in the Official Gazette, specify, and collected in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such, investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, notification, or order, as the case may be, had not been amended, repealed, suspended or rescinded. 11. From the perusal of Section 38A(c) it is evident that it shall not affect right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended or repealed, superseded or rescinded. The Supreme Court in the case of Rayala Corporation Private Ltd. (supra) while dealing with the provision of Defence of India Rules, 1962 in context of violation of provisions of Foreign Exchange Regulation Act, 1947, held that the complaint filed against the petitioner after omission of Rule 132A of the Foreign Exchange Regulations, cannot be continued as there was no saving clause. The aforesaid decision was considered by the Supreme Court in the case of M/s. Fibre Board (P) Ltd. (supra) in which Supreme Court held that ratio laid down in the case of Rayala Corporation Private Ltd. (supra) cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the furnace available or if not so possible on the pass of any other material as may be relevant for this purpose the Commissioner may if he so desires consult any technical authority for this purpose. (3) The annual capacity of production of ingots and billet or non-alloy steel in respect of such factory shall be deemed to be as determined by applying the following formula.: ACP= (TCF) 3200 ACP= Annual capacity of production of the factory producing ingots and billets of non-alloy steel in metric tonnes and TCP= Total capacity of the [furnaces] installed in the factory producing ingots and billets of non-alloy steel in metric tonnes. 14. From the perusal of the aforesaid rules as well as order passed by the Commissioner of Central Excise, it is evident that annual production capacity of the furnaces of the appellant has been carried out in terms of Rule 3(2) of the Rules with the help of technical expert and after physical measurement of the furnaces, order dated 9-3-1998 was passed. The aforesaid order was upheld by the Tribunal and it has been held by the Tribunal that in case of the closure of the furnaces for continuation but not less than seven days as per p ..... 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