A significant legal battle unfolds as the vires of Rule 5 are challenged by Mrs. Nalini Chidambaram in the Supreme Court of India. The case delves into the constitutionality of Rule 5, affecting manufacturers based on their Annual Capacity Production. Stay tuned for the latest updates on this crucial legal matter.
Issue
- The Division Bench initiated a different question unrelated to the original issue.
- The new question was whether an assessee who chooses to pay duty in accordance with Rule 96-ZP(3) can be forced to do so again.
- This question diverted from the original matter under consideration.
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Arguments
- Mrs. Nalini Chidambaram, a Senior Advocate, represented the appellant-assessee in court.
- She challenged the vires of Rule 5 in her appearance.
- The larger bench referred a different question for consideration instead of the one she brought to the court.
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Analysis
- Rule 5 of the 1997 Rules is challenged on the grounds of being ultra vires the authority conferred under Section 3-A of the Act.
- The Rule is also being challenged for being violative of Article 14 of the Constitution of India.
- The Rule creates two classes of manufacturers based on their Annual Capacity Production (ACP) compared to their actual production in the Financial Year 1996-97.
- The Division Bench has not answered a specific question in the case.
- Judgments in question did not address the vires of Rule 96-ZP(3).
- The 1997 Rules impose an irrational tax burden on a certain class of manufacturers.
- The matter has been directed to be placed before the Chief Justice of India for further orders.
- A larger bench has been deemed appropriate to settle the question of law.
- The judgments in Venus Castings (2000) 4 SCC 206 and Supreme Steels (2001) 9 SCC 645 are not considered conclusive on the issue at hand and require further examination.
- The assessee is not challenging the fact that duty can be compelled to be paid without regard to actual production as per Rule 96-ZP(3) and Section 3A(4) of the Central Excise Act.
- The question referred did not arise on the facts of the case.
- The question referred is not disputed by the assessee.
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Decision
- The appeals and tagged matters are to be placed before a Division Bench of the Court.
- Issues other than the 4 issues raised in para 51 of the judgment in Bhuwalka Steel Industries Limited and Another will be decided by the Division Bench.
- The matter is sent back to a Division Bench to decide the questions stated in para 20 of Bhuwalka Steel Industries Limited and Another.
- The Division Bench will also decide on the issues in other tagged matters.
Case Title: M/S BHUWALKA STEEL INDUSTRIES.LTD Vs. UNION OF INDIA
Case Number: C.A. No.-007823-007823 / 2014
