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2020 ] COURT-ROOM HIGHLIGHTS A141

“20. The validity of Rule 5 of the 1997 Rules is challenged
both before the High Court and before us on two grounds :
1. That the Rule is ultra vires the authority conferred un-
der Section 3A of the Act; and
2. That the Rule is violative of Article 14 of the Constitu-
tion of India. Because the Rule creates two classes of
manufacturers :-
(i) whose ACP is determined to be more than
their actual production in the Financial Year
1996-97.
(ii) Whose ACP is determined to be less than their
actual production for the Financial Year 1996-
97; and
imposes an irrational tax burden on the second of the
above-mentioned two classes of manufacturers fall-
ing within the ambit of the 1997 Rules.”
(2) This question has not been answered by the Division Bench. In-
stead, the Division Bench went into a completely different question, which
was posed as follows :-
“51. Whether an assessee who chooses once to pay duty in
terms of Rule 96ZP(3) can be compelled to pay duty calculated in ac-
cordance with the said Rule for all times to come without any regard
to the actual production is a question which requires examination.”
(3) This question was then referred to a larger Bench as follows :-
“63. Therefore, we find it difficult to accept the submission of
the respondent that the issue is covered by the judgments of this Court
in Venus Castings - (2000) 4 SCC 206 and Supreme Steels - (2001) 9 SCC
645. In our opinion, for the reasons mentioned above, these two judg-
ments require a further examination. Apart from that, these judgments
did not deal with vires of Rule 96ZP(3). However, in view of the fact
that Supreme Steels is a decision rendered by a Bench of three Learned
Judges, we deem it appropriate that the question of law be settled by a
Bench of an appropriate strength. We, therefore, direct the Registry to
place the matter before Hon’ble the Chief Justice of India for further
orders.”
(4) Mrs. Nalini Chidambaram, Learned Senior Advocate appearing
on behalf of the appellant-assessee, states that she came to Court challeng-
ing the vires of Rule 5 instead of which a completely different question has
been referred to a larger Bench. She further submits that she is not, in any
way, challenging the fact that an assessee can be compelled to pay duty in
terms of Rule 96ZP(3) without regard to actual production which is laid
down Section 3A(4) of the Central Excise Act.
(5) This being the case, we answer this reference by stating that the
question posed before us did not arise at all on facts and the question which
has been referred is not something which the assessee disputes. According-
ly, the matter is sent back to a Division Bench to decide the questions stated
in para 20 of Bhuwalka Steel Industries Limited and Another (supra). The issues
other than the issue raised in para 51 of the judgment in Bhuwalka Steel In-
dustries Limited and Another (supra) may also be decided in the other tagged
matters by the Division Bench.
EXCISE LAW TIMES  15th May 2020  49