AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 505
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....at the same are ultra vires the Central Excise Act, 1944 (hereafter the said Act of 1944) and the Constitution of India. 2. The petitioner no. 1 is engaged in manufacturing of scented chewing tobacco. The petitioner no. 2 is one of the directors of the petitioner no. 1 (hereafter the petitioner). The petitioners pray for an interim order restraining the respondents from giving any effect and/or further effect to the said notifications. SUBMISSIONS ON BEHALF OF THE PETITIONERS: 3. Mr. Majumder learned Senior Advocate appearing for the petitioners has taken this Court through the said notifications and submitted that all of them have been issued in the purported exercise of powers under Section 3A of the said Act of 1944. It was submitted that the said notifications cumulatively specify the notified goods on which there shall be production based levy of excise duty. 4. It was submitted that the same was violative of parent statute as also other laws. It was submitted that there is nothing in the said Rules of 2026 to indicate that labour laws which provide for weekly offs and not more than two shifts in a factory have been taken into consideration. It was further submi....
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....6 passed by the Hon'ble High Court of Karnataka in the case of Ghodawat Packers LLP vs. Union of India WP/100220/2026 and another order dated February 03, 2026 passed by the Hon'ble High Court of Karnataka in M/s. MVT Industries Private Limited vs. Union of India WP/3010/2026, it was submitted that similar challenges to the Rules and notifications impugned herein had been entertained by the said Hon'ble Court and interim orders had been passed in favour of the petitioners therein. 12. An order of the Hon'ble High Court of Allahabad in the case of M/s. Well Frangnances Private Limited vs. Union of India & 2 Others Writ Tax No. 891 of 2026, decided on February 04, 2026 was cited to assert that a similar challenge to the vires of Rule 16 of the said Rules of 2026 had been entertained by the said Hon'ble Court and the respondents had been restrained from taking coercive steps against the petitioners before the Court for non-compliance with the said 2026 Rules till the next date. 13. Mr. Majumder pressed for interim orders restraining the respondents from taking any coercive steps against the petitioners for non-compliance with the said Rules of 2026. SUBMISSIONS ON BEHALF OF T....
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....ate of Kerala & Others 1960 SCC OnLine SC 7 and submitted that the said Rules of 2026 are not discriminatory and treat all manufacturers alike. Relying on the judgment in the case of Gopal Corporates LLP (supra), it was submitted that mode of determination of maximum capacity of production as indicated in Rule 5 of the said Rules of 2026 owes its genesis to Section 3A of the said Act of 1944 itself. 19. It was submitted that there was nothing arbitrary in the said Rules of 2026 and this Court should not grant any interim order as prayed for. 20. Referring to the chart presented by the petitioner at pages 68 and 69 of the writ petition; he submitted that the same are self-serving and misleading. REPLY BY THE PETITIONERS: 21. Mr. Majumder in reply submitted that the minutes of the GOM all pertained to discussions in the context of capacity based taxation and Special Composition Scheme in certain sectors in GST. The Court was taken through the minutes and it was demonstrated that the same did not disclose crystallization of any law and rather indicated that the discussions made were subject to be examined by the Law Committee. It was submitted that in any case the same had....
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....f Assistant Principal Commissioner of Central Excise or Commissioner of Central Excise] and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production: Provided further that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be re-determined on a proportionate basis having regard to such alteration or modification. (3) The duty of excise on notified goods shall be levied, at such rate, on the unit of production or, as the case may be, on such factor relevant to the production, as the Central Government may, by notification in the Official Gazette, specify, and collected in such manner as may be prescribed: Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abate....
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....he same may not be quite correct. 32. Section 3A(2)(b)(i) and (ii) of the said Act of 1944 provides that the Central Government may frame rules and specify the factors relevant to production of the notified goods. In the case at hand Rule 4 enumerates the number of packing machines and the maximum capacity of production of such packing machines as the relevant factors. Similarly, section 3A(2)(b)(ii) of the said Act of 1944 provides that the Central Government may frame rules and provide the manner of determination of the annual capacity of production of the factory, in which goods are produced. Rule 5 provides the manner of determination of the annual capacity of production in terms of the provisions of section 3A(2)(b)(ii) of the said Act of 1944. 33. Now it has been asserted that the same specifies arbitrary figures. It would appear to be so if one looks at it from the actual production point of view. It must be remembered that Rule 5 provides the maximum capacity of production per packing machine per month for notified goods regardless of the actual quantity produced. It cannot be said with certainty and could not be demonstrated before the Court that the figures mentione....