TaxTMI 
TaxTMI 
2010 (9) TMI 338
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....admitted vide order dated 23rd September, 2009 to consider the following substantial question of law : "Whether the Hon'ble Tribunal erred in holding that Notification No. 42/98-C.E. (N.T.), dated 10-12-1998 was ultra vires the provisions of Central Excise Act, 1944, since as contemplated under the statutory-proviso in Section 3A of the Central Excise Act, the Notification No. 42/98 C.E. (N.T.) contains various factors based on which the annual production capacity is to be determined?" The Facts : 2. The factual background giving rise to the aforesaid question of law is that the respondent is engaged in manufacturing man made fabrics classifiable under Chapters 52, 54, 55 and 60 of the Schedule to Central Excise Tariff Act, 1....
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....e aforesaid order-in-appeal, respondent-assessee carried appeal to the Tribunal. The respondent during the course of hearing brought to the notice of the Tribunal, a judgment of the Madras High Court in the case of Beauty Dyers v. Union of India, 2004 (166) E.L.T. 27 (Mad.) with one more judgment in the case of respondent assessee itself reported in 2004 (163) E.L.T. 28. In the case of Beauty Dyers (supra), Madras High Court was pleased to declare the Notification No. 42/98, issued in exercise of powers under Section 3A of the Act, under which ACP was determined, as constitutionally invalid. The said judgment of the Madras High Court was followed by the Tribunal in the case of Raji Thangam Textiles Ltd. v. C.C.E., Coimbatore, 2006 (205) E.L....
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....dras High Court in case of Beauty Dyers (supra) was very much binding on the Tribunal. The Tribunal could not have brushed aside the said judgment of the Madras High Court since there was no other judgment of the jurisdictional High Court muchless of any other High Court taking contrary view. He submits that the law on the subject is absolutely clear; wherein various High Courts and Apex Court have ruled from time to time that the Tribunals are bound by the judgment of the High Court in absence of any contrary judgment of the jurisdictional High Court. He, thus, submits that the Tribunal was bound by the judgment of the Madras High Court. In support of his submission, he placed reliance on the Division Bench judgment of this Court in the ca....
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....to the facts of this case. Consideration : 13. Having heard rival contentions, the submissions made by Mr. Sanklecha need acceptance. In the case of Smt. Godavaridevi Saraf (supra), the Division Bench of this Court observed as under : "Question then arises what is going to be the effect of a decision of the Madras High Court holding that Section 140A(3) is unconstitutional as violative of Article 19(1)(f) of the Constitution. A similar question came up for consideration before the Supreme Court in the case of East India Commercial Co. Ltd. v. Collector of Customs, Calcutta, MANU/SC/0179/1962 : 1983 (13) E.L.T. 1342 (S.C.), wherein it was held that an administrative Tribunal cannot ignore the law declared by the highest court ....
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....is an All-India statute and if an Income-tax Tribunal in Madras, in view of the decision of the Madras High Court, has no proceed on the footing that Section 140A(3) was non-existent, the order of penalty thereunder cannot be imposed by the authority under the Act. Until contrary decision is given by any other competent High Court, which is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land. When the Tribunal set aside the order of penalty it did not go into the question of intra vires or ultra vires. It did not go into the question of constitutionality of Section 140A(3). That section was already declared ultra vires b....