Delegated legislation and excise valuation: Bombay HC upheld a notification using adjusted sale price as a valid levy basis.

Notification No. 201 of 1985, issued under Rule 8 of the Central Excise Rules, 1944, was challenged as ultra vires because it used adjusted sale price as the basis of levy and was said to produce unworkable results. The HC held that Rule 8(3) and its explanation permitted exemption and valuation by a method different from the ordinary statutory form, and that adjusted sale price was a permissible and ascertainable basis known in advance to manufacturers. A delegated legislative notification could not be struck down merely because it appeared anomalous or difficult to apply, since such considerations do not invalidate authorised legislative instruments. The notification was therefore within the parent rule and the Act, and was upheld as valid.

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Issues: Whether Notification No. 201 of 1985, as amended, issued under Rule 8 of the Central Excise Rules, 1944, was ultra vires on the ground that it adopted the adjusted sale price as the basis for levy and produced unworkable or absurd results.

Analysis: The challenge was confined to the validity of the notification. Rule 8(3) permits exemption by prescribing a duty rate in a form or method different from the statutory form or method, and its explanation permits valuation or other measures as the basis of levy. The adjusted sale price fixed by the notification was treated as a permissible basis of valuation, capable of being ascertained with certainty and known in advance to manufacturers. The Court held that a notification issued as delegated legislation cannot be struck down merely because it may appear unworkable, anomalous, or the result of non-application of mind; such grounds may be relevant to executive action but not to a valid legislative instrument. The notification was also held to be within the scope of the parent rule and not contrary to the Act.

Conclusion: The notification was upheld as valid and intra vires; the challenge failed.

Final Conclusion: The petition did not succeed, and the impugned notification remained effective.

Ratio Decidendi: A notification issued as delegated legislation cannot be invalidated merely on the ground that it is unworkable or appears anomalous, so long as it is authorised by the parent statute and the enabling rule permits the adopted basis of levy.

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