TaxTMI 
TaxTMI 
2000 (4) TMI 37
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.... made by the Collector is not in accordance with law inasmuch as no duty is payable by the manufacturer otherwise than on actual production and clearance and no demand of duty could be made or recovered on the basis of production capacity alone without verification. In case of M/s. Minakshi Castings (P) Ltd., one of the respondents before us, it is held that the right vested in the assessee under Section 3A(4) cannot be denied on the ground that he had opted for payment of duty under Rule 96ZO (3). The matter is remanded to the Commissioner for determination of the actual production and re-determination of duty liable to be paid with reference to the actual production in accordance with the provisions of Section 3A(4). Hence these appeals. 2.In another batch of matters writ petitions have been filed before the High Court of Delhi and certain orders have been obtained thereto at the interim stage which are subject matter of another appeal before us and in those circumstances the Delhi High Court had ordered that "it will be open to the manufacturers to submit applications on the basis of actual production and, if any such application is submitted, the same shall be duly considere....
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....procedure instead of the procedure under sub-rules (1) and (2) thereof and once such option is availed of he takes advantages and disadvantages associated with it. An assessee who comes under the purview of sub-rule (3) of the scheme cannot obviously avail of the reliefs provided to the assessee who preferred to pay duty in accordance with sub-rule (1) thereof. The High Court further stated that it is not probable that the assessee will not be aware of the adverse factors which affect production. He cannot, therefore, claim that provisions for abatement of duty and re-determination of the capacity as contained in the proviso to sub-section (3) and (4) of Section 3A should be imported to Rule 96ZO(3). When once the assessee opts for lumpsum payment under Rule 96ZO(3) he forgoes the benefit under the proviso to sub-sections (3) and (4) of Section 3A as laid down in express and categorical terms by sub-rule (3) of Rule 96ZO of the Excise Rules. The Allahabad High Court in Pravesh Castings (P) Ltd., Kanpur Nagar v. Commissioner of Central Excise, Allahabad & Anr., 2000 (117) E.L.T. 294 (All.) = 2000 (36) RLT 239, directed the Commissioner to re-determine the production capacity afresh ....
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....ht of as appropriate. Under the scheme evolved in this provision the annual production capacity of mills and furnaces is determined by the Commissioner of Central Excise in terms of the Rules to be framed under Section 3A(2) of the Act by the Central Government. Thereafter, the assessee would be liable to pay duty based on such determination. If the annual production capacity determined by the Commissioner is disputed by the assessee, the Commissioner is required to re-determine the same as provided in Section 3A(4). 9.Rules 96ZO and 96ZP provide for procedure to be followed by the manufacturer of ingots and billets and hot re-rolled products respectively. The scheme envisaged under these provisions is identical. These two Rules come into play after the Commissioner of Central Excise determines the annual capacity of the factory or mills manufacturing ingots or billets and hot re-rolled steel products under Section 3A of the Act read with the relevant annual capacity determination rules. Rules 96ZO and 96ZP proceed to lay down the manner of payment of duty, claim for abatement non-payment, payment of interest/penalty and such other incidental matters. Rule 96ZO classifies the ma....
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....annual capacity of production. An assessee cannot have a hybrid procedure of combining the procedure under Rule 96ZO(1) to which Section 3A(4) of the Act is attracted. The claim by the respondents is a hybrid procedure of taking advantage of the payment of lumpsum on the basis of total furnace capacity and not on the basis of actual capacity of production. Such a procedure cannot be adopted at all, for the two procedures are alternative schemes of payment of tax. 11.The learned Counsel for the respondent contended that the Rule 96ZO(3) is contrary to Section 3A(4) of the Act and, therefore, should be held to be ultra vires or read the relevant rules in such a manner as to allow the procedure prescribed under the provisions of Section 3A(4) to be followed. Section 3A of the Act provides for levy and collection of the tax arising under the Act in such manner and at such rate as may be prescribed by the Rules. Section 3A provides special procedure in respect of the power of the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. If such interpretation is not accepted, it is contended, that the levy of tax is in the nature of....