TaxTMI 
TaxTMI 
2011 (7) TMI 10
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....Customs, Excise and Gold (Control) Appellate Tribunal, as it then existed, (for short "the Tribunal") have been answered in favour of the assessee and the review applications preferred by the Commissioner against the said judgments have been dismissed. 3. Since all the appeals involve a common question of law, these are being disposed of by this common judgment. However, to appreciate the controversy, the facts emerging from C.A.No.3400 of 2003 are being adverted to. These are as follows : 4. Section 3A of the Act, which has a chequered history of insertions and omissions in the Act, was inserted in the Act for the second time by Act 26 of 1997, with effect from 14th May, 1997, the provision relevant for the purpose of these appeals. The Section has again been omitted by Act 14 of 2001, with effect from 11th May, 2001. Section 3A of the Act enables the Central Government to charge Excise duty on goods on the basis of annual capacity of production of mills etc. in respect of the notified goods. The relevant part of the Section reads as follows: "3A. Power of Central Government to charge excise duty on the basis of capacity of production in res....
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....ard the interest of revenue in the sectors, like induction furnaces, steel re-rolling mills etc., where evasion of Excise duty on goods produced in such mills was rampant. The provision authorises the Central Government to notify certain goods, for levy and collection of duty of Excise on such goods, in accordance with the provision of the said Section, having regard to the extent of evasion of duty as also other relevant factors. The scheme evolved under this provision, envisages the determination of annual capacity of production of such factory by an officer not below the rank of Assistant Commissioner of Central Excise in terms of the rules to be framed by the Central Government under sub-section (2) of Section 3A of the Act. The annual capacity of production of the factory is deemed to be the annual production of such goods by such factory, on which an assessee is liable to pay duty. The two provisos to sub-section (2) of Section 3A of the Act, provide for determination/re-determination of annual capacity of production in the event of operation of the factory during a part of the year or alteration or modification in any of the factors relevant to the production of the factory.....
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.... be deemed to be 0.30 in case of low speed mills, and 0.75 in case of high speed mills the value of `w' factor in the formula for the high speed mills shall be deemed to be 0.45 and for the low speed mills shall be deemed to be as under, - .................................................................................... .................................................................................... 4. the Commissioner of Central Excise shall, as soon as may be, after determining the total capacity of the hot re-rolling mill installed in the factory as also the annual capacity of production, by an order, intimate to the manufacturer. Provided that the Commissioner may determine the annual capacity of the hot re-rolling unit on provisional basis pending verification of the declaration furnished by the hot re-rolling mills and pass an order accordingly. Thereafter, the Commissioner may determine the annual capacity, as soon as may be, and pass an order accordingly. 4 (1) The capacity of production for any part of the year, or any change in the total hot re-rolling mill capacity, shall be calculated pro rata on the basis of the annual cap....
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....ules on the ground that they have changed some of the parameters of their mill. The request was acceded to and vide order dated 27th January 2000, the Commissioner, applying the formula as laid down under Rule 3(3), determined the annual capacity of the mill at 7328.435 MT but relying on Rule 5, he again computed the annual capacity at 11961.135 MT, being equal to the actual production of the mill during the financial year 1996-97. 10. Aggrieved by the said order of the Commissioner, the respondent filed an appeal before the Tribunal. The Tribunal, vide order dated 6th April, 2000, allowed the appeal and held that Rule 5 of the 1997 Rules cannot be applied in view of change in technical parameters of the rolling mill. 11. Dissatisfied with the said order, the Commissioner made an application to the High Court under Section 35H of the Act, seeking a direction to the Tribunal to refer the question of law, which according to him, arose from the order of the Tribunal. Vide order dated 17th October, 2001, the High Court rejected the reference petition holding that no question of law arose from the order of the Tribunal. The High Court has held that the provisions of ....
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....e 4(2), the production capacity of the rolling mill has to be determined under the said Rule 3(3) as there is no other rule to take care of such a situation. It was argued that when the production capacity of a factory is to be determined under the said Rule, Rule 5 will automatically come into play. Relying on the clarification issued by the Board vide Circular dated 26th February 1998, learned counsel argued that since reference to previous year's production in Rule 5 of the 1997 Rules is to the actual production of the mill and does not relate to the technical parameters of the machinery, the actual production of the year 1996-97 would be relevant for determining the current year's duty liability under Section 3A of the Act, even when parameters of the machinery are altered. It was thus, asserted that since re-determination of capacity of production under Rule 4(2) has to be done by the formulae prescribed in the said Rule 3(3), the provisions of Rule 5 cannot be disregarded. Commending us to the decision of this Court in Commissioner of Customs, Bangalore Vs. ACER India (P) Ltd. (2008) 1 SCC 382 , learned counsel contended that the Rules relating to determination of capacity of....
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.... is an exception to Section 3 of the Act - the charging Section and being in nature of a non obstante provision, the provisions contained in the said Section override those of Section 3 of the Act. Rule 3 of 1997 Rules framed in terms of Section 3A(2) of the Act lays down the procedure for determining the annual capacity of production of the factory. Sub-rule (3) of that Rule contains a specific formula for determination of annual capacity of production of hot rolled products. This is the only formula whereunder the annual capacity of production of the factory, for the purpose of charging duty in terms of Section 3A of the Act, is to be determined. Second proviso to sub-section (2) of Section 3A of the Act contemplates re-determination of annual production in a case when there is alteration or modification in any factor relevant to the production of the specified goods but such re-determination has again to be as per the formula prescribed in Rule 3(3) of the 1997 Rules. It is clear that sub-rule (2) of Rule 4, which, in effect, permits a manufacturer to make a change in the installed machinery or part thereof which tends to change the value of either of the parameters, r....
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....tatute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency." 22. In Mathuram Agrawal Vs. State of Madhya Pradesh (1999) 8 SCC 667 , D.P. Mohapatra, J. speaking for the Constitution Bench, stated the law on the point in the following terms: "The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law i.e. the subject of the tax, t....