TaxTMI 
TaxTMI 
2003 (3) TMI 131
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....duty on the basis of the capacity of production in respect of goods that the Central Government may specify by a notification in the Official Gazette. Annexure 'A' is the notification. In exercise of the powers conferred by sub-section (1) of Section 3A of the Central Excise Act, the Central Government specified by a notification dated 1-8-1997, the ingots and billets of non-alloy steel falling under sub-heading Nos. 7206.90 and 7207.90 and manufactured or produced as 'notified goods' on which the duty is levied and collected in accordance with the provisions of the Act. Annexure 'B' is another notification. The Government also issued a subsequent notification dated 25-7-1997, in terms of Annexure 'C'. Annexure 'D' is a notification dated 1-8-1997, bringing into force the Central Excise (Seventh Amendment) Rules of 1997. The Central Government also issued Rules known as Central Excise Rules 1997 in terms of a notification dated 30-8-1997. 3.The petitioner opted for discharge of duty liable every month on a lumpsum basis at Rs. 6 lakhs per month in terms of the Rules. According to the petitioner, the furnace capacity was 3.6 MTs and on a pro rata basis, the duty liability worked ou....
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....nd power is an essential factor requiring consideration in the matter of determination of capacity. Certain certificates have also been filed by the petitioner in this regard. The Central Excise Act provides for levy of Central Excise on the manufactured goods. Annexure 'B' is with regard to notified goods on which duty will be levied and collected in accordance with Sec. 3A of the Act. Rules have been framed known as 'Induction Furnace Annual Capacity Determination Rules'. The said Rules have been introduced in the light of sub-section (2) of Sec. 2, sub-section (2) of Sec. 3A provides for determination of the annual capacity of production. Rule 2 of the Rules provide for determination of the annual capacity of production of the factory if such goods are manufactured in an Induction Furnace Unit. The annual capacity of production is determined in terms of Rule 3 of the Rules. Rule 3 reads as under : "3. The annual capacity of production referred to in Rule 2 shall be determined in the following manner, namely : - (1) the Commissioner of Central Excise (hereinafter referred to as the Commissioner) shall call for an authenticated copy of the manufacturer's invoice or trader's invo....
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....500 KW power of Crucible capacity. He further says that Crucible or induction Furnace is able to produce the same unless and otherwise matched with proper KW power pack. According to the petitioner, the actual capacity of crucible based on furnace power pack would be 3.600 MT. To come to this figure power factor is taken into consideration. The respondent however issued a determination in terms of Annexure 'H'. On receipt of the same, the petitioner questioned the same by sayinq that the said determination is not based on facts. Material was sought for by the respondents. The petitioner produced authenticated copies of the invoices of the suppliers of the furnace crucibles to their induction furnace unit. The petitioner also has given detailed reasons as to how the power factor plays a vital role. After receipt of the same, the respondents have issued an endorsement and in the endorsement this is what is stated by the respondents : "In this connection, it is to inform you that, the capacity of production has been fixed on the basis of available documents indicating the capacity of Furnace/Crucibles as per Notification No. 24/97-C.E. (N.T.), dated 25-7-1997. Accordingly, the Annual....
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....he furnace. The second contingency is that in the absence of the invoice document being available for any reason with the manufacturer that the Commissioner is to ascertain the capacity on the basis of the capacity of the comparable furnaces available in similar industry. The third contingency is determination of the annual capacity of production of ingots by formula. The formula is ACP = TCF x 3200. ACP is nothing but the annual capacity of production of the factory. TCF is also again referred to the total capacity. Therefore, capacity plays a vital role in terms of levy of excess duty. 12.In the case on hand, the petitioner has sought for an option that the annual capacity is to be determined on pro rata basis in terms of Rule 96ZO(3) of the Rules. Petitioner has produced sufficient material, with regard to power factor being a relevant one. As I mentioned earlier, it is not the case of the respondents that power factor is not a relevant factor in terms of the endorsement. Helplessness is the answer given in the endorsement. There is no prohibition under the Rules for taking into consideration the power factor for determination of the annual capacity. So long the power factor is....
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....es of the grammar, by giving an unusual meaning to particular words, or by rejecting them altogether, on the ground that the legislature could not possibly have intended what its words signify, and that the modifications made are mere corrections of careless language and really give the true meaning. Where the main object and the intention of a statute are clear, it must not be reduced to a nullity by the draftman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used. Lord Reid has said that he prefers to see a mistake on the part of the draftsman in doing his revision rather than a deliberate attempt to introduce an irrational rule. The canons of construction are not so rigid as to prevent a realisitic solution." 13.In the light of this legal principle with regard to Interpretation of Statutes, I am of the view that instead of striking down the Rule it can be read as providing for taking into consideration of power as a relevant factor so that justice is rendered to all the parties concerned. Otherwise, the very object of providing a relevant factor in terms of Sec. 3A is defeated. Therefore instead of striking....