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TMI Blog2022 (12) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose and that purpose is carried out by the rules, the same cannot be stated to be ultra vires of the provisions of the enactment. Therefore, it is made clear that the manufacturers, if they have availed of the procedure under Rule 96ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Act which is specifically excluded. The present writ petition is disposed off. - WRIT PETITION No. 917 of 1999 - - - Dated:- 23-12-2022 - HON BLE THE CHIEF JUSTICE UJJAL BHUYAN AND HON BLE SRI JUSTICE C.V. BHASKAR REDDY Petitioner Advocate : Vivek Chandra Sekhar S Respondent Advocate : Jalakam Sathyaramsr Sc For Cb Excise ORDER: (PER THE HON BLE THE CHIEF JUSTICE UJJA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to introduce this provision appears to be that in certain sectors, like induction furnaces, steel re-rolled mills, etc. evasion of excise duty on goods is substantial and the production is not disclosed accurately and collection of excise duty on the basis of their production capacity is thought of as appropriate. Under the scheme evolved in this provision the annual production capacity of mills and furnaces is determined by the Commissioner of Central Excise in terms of the Rules to be framed under Section 3A(2) of the Act by the Central Government. Thereafter, the assessee would be liable to pay duty based on such determination. If the annual production capacity determined by the Commissioner is disputed by the assessee, the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate procedure. Sub-rule (3) thereof envisages a composition method of payment of duty. Manufacturers of ingots and billets with furnace capacity of 3 tonnes have an option of paying duty of Rs. Five lakhs per month in two equal instalments prior to 15th of a month and by last date of that month. Such payment is treated to be in full discharge of duty liability. The Rule specifically excludes application of Section 3A(4). But manufacturers opting for this composite scheme cannot claim abatement. If the furnace capacity is less than or more than 3 tonnes payment of Rs. 5 lakhs can be varied on pro rata basis. The manufacturer opting for this composite scheme has to give a declaration to the Jurisdictional Assistant Commissioner as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and, therefore, should be held to be ultra vires or read the relevant rules in such a manner as to allow the procedure prescribed under the provisions of Section 3A(4) to be followed. Section 3A of the Act provides for levy and collection of the tax arising under the Act in such manner and at such rate as may be prescribed by the Rules. Section 3A provides special procedure in respect of the power of the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. If such interpretation is not accepted, it is contended, that the levy of tax is in the nature of a licence fee and not on production of goods at all. Schemes of composition are available in several other enactments including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. We find that the view taken by the Andhra Pradesh high Court in Sathawahana Steels Alloys (P) Ltd. v. Government of India (1999 (114) ELT 787 (AP)) and the similar view expressed by the Division Bench of the Allahabad High Court in Civil Miscellaneous Writ Petition No. 1127 of 1999 M/s: Jalan Castings (P) Ltd v. Commissioner of Central Excise Ors. disposed of on February 28, 2000 is reasonable and correct. We overrule the view taken by the Allahabad High Court in Pravesh Castings (P) Ltd. Kanpur Nagar v. Commissioner of Central Excise, Allahabad Anr. (2000 (117) ELT 294 (All)). 12. On the reasoning adopted by us and bearing in mind that in taxation measures composition schemes are not unknown and when such scheme is avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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