9911796707
TMI Blog2000 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3A and Sub-rule (3) of Rule 96-ZO of the Central Excise Rules, the following points were referred to this Larger Bench by a Division Bench of two Members of this Tribunal in May 1999. "(i) Whether there is any conflict between the provisions of sub-section (4) of section 3A of the Central Excise Act and sub-rule (3) of Rules 96-ZO of the Central Excise Rules? (ii) Whether a manufacturer who has exercised the option to make payment of amount based on total furnace capacity installed in his factory under sub-rule (3) of Rule 96-ZO and not on the basis of annual capacity of production can make an application for determining the actual production during the period his aforesaid option is in operation?" 2. After hearing the Counsels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant financial year, otherwise interest at the rate of 18 per cent per annum is payable and if the duty has not been paid by this date penalty is also payable which is equal to outstanding duty or Rs. Five thousand whichever is greater. Sub-rule (2) thereof provides that if no ingots and billets are produced for a continuous period of seven days, the manufacturer may claim abatement by following appropriate procedure. Sub-rule (3) thereof envisages a composition method of payment of duty. Manufacturers on 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents is a hybrid procedure of taking advantage of the payment of lumpsum on the basis of total furnace capacity and not on the basis of actual capacity of production. Such a procedure cannot be adopted at all, for the two procedures are alternative schemes of payment of tax. 11. The learned Counsel for the respondent contended that the Rule 96-ZO(3) is contrary to Section 3A(4) of the 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. We find that the view taken by the Andhra Pradesh High Court in Sathavahana 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. 112, of 1999 M/s. Jalan Castings (P) Ltd. v. Commissioner of Central Excise & Ors. Disposed of on February 28, 2000 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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