Statutory override of conflicting rule led to remand for fresh consideration of Section 3A(4) relief in excise dispute.

Where a statutory provision and a subordinate rule conflict, the statutory provision prevails; accordingly, Section 3A of the Central Excise Act was treated as overriding Rule 96ZO(3) of the Central Excise Rules. On that basis, the Tribunal held that the assessee's option under the rule did not finally exclude consideration of the benefit under Section 3A(4), and the matter had to be examined afresh on the correct statutory footing. The dispute was therefore remanded for redetermination of annual production capacity and, if necessary, differential duty after hearing the assessee, with interim relief on pre-deposit granted.

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Issues: Whether the assessee, having opted for Rule 96ZO(3) of the Central Excise Rules, 1944, could still claim the benefit of sub-section (4) of Section 3A of the Central Excise Act, 1944, and whether the matter required remand for fresh determination of annual production capacity and differential duty.

Analysis: The Tribunal noted that the same legal question had earlier been examined in a similar matter, where it was held that the provision of Section 3A prevails over the rule, and that in case of any inconsistency the statutory provision would override the rule. In view of that principle, and since the Commissioner had decided the issue against the assessee on the footing that the option under Rule 96ZO(3) excluded the benefit under Section 3A(4), further examination of the facts and computation was considered necessary.

Conclusion: The assessee was entitled to have the matter reconsidered afresh under Section 3A(4), and the case was remanded for redetermination of annual production capacity and, if required, differential duty after affording an opportunity of hearing.

Final Conclusion: The order resulted in remand of the dispute for fresh adjudication on the applicable statutory basis, with interim relief on pre-deposit granted to the assessee.

Ratio Decidendi: Where a statutory provision and a subordinate rule are inconsistent, the statutory provision prevails, and the issue must be reconsidered on that basis.

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