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TMI Blog2006 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... mining capacity of production of notified goods. As per Notification No. 46/97, dated 1-8-1997, on non-alloy steel ingots and billets falling under sub-heading Nos. 7206.90 and 7207.90 of the Schedule to the Central Excise Tariff Act, 1985, excise duty payable is Rs. 750/- per metric tonne on the annual capacity of production determinable under the Induction Furnace Annual Capacity Determination Rules, 1997. Rule 3 of the said rules lays down the procedure for computing the capacity of production. Rule 96ZO introduced with effect from the same date by the Central Excise (Seventh Amendment) Rules, 1997 lays down procedure to be followed by manufacturer of Ingots and billets. Sub-rule (3) thereof provides for payment of lump-sum amount in full and final discharge of duty, at the option of manufacturer, subject to the condition that on giving such an option, manufacturer will not be entitled to avail of benefit under Proviso to sub-section (3) or (4) of Section 3A of the Act. 4.The petitioner received notice dated 26-3-1998 to show cause as to why the amount of excise duty be not recovered and penal action taken for clearing goods without discharging liability under Rule 9(1) read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is further pointed out that abatement claim in respect of period of closure was also denied, where one furnace remained closed or inoperative, while production capacity was determined furnace-wise and not factory-wise. 9.Stand taken in the reply filed before the Delhi High Court, Annexure P. 3 is that the petitioners themselves filed declaration and agreed to pay excise duty on lump-sum basis vide their letter dated 11-9-1997, Annexure R. I. The amendment was valid and was upheld by Andhra Pradesh High Court in Sarwotham Ispat Ltd. v. Government of India, 1999 (105) E.L.T. 550. In further reply, Annexure P. 7, it was further pointed out that in view of judgment of the Hon'ble Supreme Court in Commissioner of C. Ex. Customs v. Venus Castings (P) Ltd., 2000 (117) E.L.T. 273, procedure under Rule 96ZO(3) being optional and assessee having opted for the same, could not seek determination of actual production under Rule 96ZO(1) read with section 3A(4) of the Act. 10.We having heard learned Counsel for the petitioner at length. 11.The relevant provisions of Section 3A of the Act are extracted below :- "3A. Determination of annual capacity of production of the factory for l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teen days or more, duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed. (4) Where an assessee claims that the actual production of notified goods in his factory is lower than the production determined under sub-section (2), Central Excise Officer not below the rank of Joint 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). (5) Where the Central Excise Officer not below the rank of Joint Commissioner of Central Excise determines the actual production under sub-section (4), the amount of duty already paid, if any, shall be adjusted against the duty so redetermined and if the duty already paid falls short of, or is in excess of, the duty so redetermined, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. (6) the provisions of this section shall not apply to goods produced or manufactured - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not unusual. Irrespective of the fact whether the Central Government in fixing the lump-sum amount of Rs. 5 lakhs under sub-rule (3) had taken into account the eventuality of power cuts, the petitioner who opted for the scheme under sub-rule (3) on his own volition and choice, cannot be allowed to complain of the validity of that rule. Nor can he claim that the provisions for abatement of duty and redetermination of the capacity as contained in the proviso to sub section (3) and sub-section (4) of Section 3A should be imported into Rule 96ZO(3). When once the assessee opts for lump-sum payment under Rule 96ZO(3), he forgoes the benefit under the proviso to sub-section (3) and sub section (4) of Section 3A as laid down in express and categorical terms by sub-rule (3) of Rule 96ZO. The argument advanced on behalf of the petitioners ignores the crucial point that payment of duty as per sub-rule (3) is not compulsive, but is only optional. We, therefore, fail to see how the assessee could challenge the same, more so after he voluntarily opted for the scheme. In fact, we are inclined to think that the lump-sum duty on compounded basis would be much less than the duty payable with refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion thereto. If the entire enactment is read as a whole indicates 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 procedure under Rule 96 ZO(3) at their option, cannot claim the benefit of determination of production capacity under Section 3A(4) of the Act which is specifically excluded. We find that the view taken by the Andhra Pradesh high Court in Sathawahana Steels Alloys (P) Ltd. v. Government of India (supra) 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 . another (supra). 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 availed of by the assessee it is not at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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