Annual production capacity duty dispute remanded pending Supreme Court ruling on the validity of the levy rule

Differential duty based on redetermination of annual production capacity under the hot rerolling mills scheme could not be finally decided while the validity of Rule 96ZP(3) was pending before a Larger Bench of the Supreme Court. Because the governing rule had already been doubted in earlier litigation, the Tribunal held that a merits determination at that stage was inappropriate. The impugned order was set aside and the matter remanded to the original authority for decision after the Supreme Court's Larger Bench ruling.

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Issues: Whether the demand of differential duty based on redetermination of annual production capacity under Rule 96ZP could be sustained when the validity of the rule was under consideration before the Supreme Court.

Analysis: The dispute related to levy of duty on the basis of annual production capacity under Rule 96ZP read with the Hot Rerolling Mills Annual Capacity Determination Rules, 1997. The validity of Rule 96ZP(3) had already been doubted in earlier litigation, and the same issue had been referred to a Larger Bench of the Supreme Court. In that situation, a final determination on the merits by the Tribunal was considered inappropriate at that stage.

Conclusion: The impugned order was set aside and the matter was remanded to the original authority to be decided after the outcome of the Larger Bench proceedings.

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