Capacity-based excise assessment upheld as Rule 5 challenge fails in light of binding Supreme Court precedent.

The challenge to Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 was rejected because the Supreme Court had already upheld the capacity-based assessment scheme under Section 3A of the Central Excise and Salt Act, 1944, including the connected rules. As the binding precedent in Commissioner of Central Excise & Customs v. Venus Castings (P) Limited covered the issue, the Telangana HC found no scope to declare Rule 5 ultra vires or violative of Article 14, and the writ petition was disposed of accordingly.

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Issues: Whether Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 could be declared ultra vires Section 3A of the Central Excise and Salt Act, 1944 and violative of Article 14 of the Constitution of India.

Analysis: The writ petition was disposed of in the light of the binding pronouncement of the Supreme Court in Commissioner of Central Excise & Customs v. Venus Castings (P) Limited, which upheld the scheme of assessment based on production capacity under Section 3A and the connected rules. The challenge to the rule was therefore covered by precedent, leaving no scope for a contrary declaration in the present petition.

Conclusion: The challenge to Rule 5 was not accepted and the petition stood disposed of following the Supreme Court ruling.

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