Supreme Court of India
M/S BHUWALKA STEEL INDUSTRIES LTD. & ANR. versus UNION OF INDIA & ORS. on 5 December 2019
16
SUPREME COURT REPORTS
[2019] 15 S.C.R.
AM/S BHUWALKA STEEL INDUSTRIES LTD. & ANR.
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 7823 of 2014)
BDECEMBER 05, 2019
[R. F. NARIMAN, ANIRUDDHA BOSE ANDV. RAMASUBRAMANIAN, JJ.]
Central Excise Act, 1944 – S.3A – Central Excise Rules, 1944C– r.96-ZP(3) – Hot Re-Rolling Steel Mills Annual CapacityDetermination Rules, 1997 – r. 5 – Validity of r. 5 – The questionbefore the Division Bench of Supreme Court in Bhuwalka SteelIndustries Ltd. was regarding the validity of r.5 of the 1997 Rules –This question was not answered and instead the Division Bench Dwent into a completely different question i.e. vires of r. 96-ZP (3)and same was referred to the Larger Bench – Appellant-assesseestated that they were only challenging the vires of r.5 and were notchallenging the fact that an assessee can be compelled to pay dutyin terms of r.96-ZP(3) without regard to actual production which islaid down s.3A(4) of the Central Excise Act – Held: The questionEposed before the Larger Bench did not arise on facts and the questionwhich was referred is not something which the assessee disputes –Accordingly, the matter sent back to a Division Bench to decide thequestions stated in para 20 & issue raised in para 51 of BhuwalkaSteel Industries Ltd. and Anr.
F
Bhuwalka Steel Industries Limited and Another v. Unionof India and Others, (2017) 5 SCC 598 – referred to.
Case Law Reference
(2017) 5 SCC 598 referred toPara 1GCIVIL APPELLATE JURISDICTION: Civil Appeal No. 7823of 2014.
From the Judgment and Order dated 27.09.2013 of the High Courtof Karnataka at Bangalore in Writ Appeal No. 315 of 2006.
H
With
Civil Appeal Nos. 7824, 7825 of 2014, S.L.P.(C) Nos. 16445 of2010, 2014 of 2009, 34051 of 2017, T.C. (C) Nos. 20, 22, 23-24, 34 of2010, 1, 2, 3, 4, 5 of 2011, 106 of 2015, T.P. (C) Nos. 419, 691, 1200 of2016, Mrs. Nalini Chidambaram, K. Radhakrishnan, Balbir Singh,Sr. Advs., Ms. Anushree Menon, Vikas Mehta, Ms. Shirin Khajuria,Ms. Nisha Bachi, Ms. Pooja Sharma, B. Krishna Prasad, Mrs. AnilKatiyar, Ms. Sheena Taqui, Ms. Suvarna Dubey, Kshitij Vaibhav,Mrs. Bina Gupta, Shantanu Tyagi, Ms. Nandita Chauhan, S. S. Shroff,M. P. Devanath, Saurabh Mishra, Ugra Shankar Prasad, Jitendra MohanSharma, Shreekant N. Terdal, M/s. COAC, Ms. Ruchira Goel,Purushottam Sharma Tripathi, Advs. for the appearing parties.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
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1. The present reference arises from a judgment of the DivisionBench of this Court reported as Bhuwalka Steel Industries Limitedand Anothervs. Union of India andOthers, (2017) 5 SCC 598. Thequestion before the Court was set out as follows:- “20. The validity of Rule 5 of the 1997 Rules is challenged bothbefore the High Court and before us on two grounds:
1. That the Rule is ultra vires the authority conferred under Section 3-A of the Act; and
2. That the Rule is violative of Article 14 of the Constitution ofIndia. Because the Rule creates two classes of manufacturers:-
(i) whose ACP is determined to be more than their actualproduction in the Financial Year 1996-97.
(ii) Whose ACP is determined to be less than their actualproduction for the Financial year 1996-97; and imposes an irrational tax burden on the second of the above-mentioned two classes of manufacturers falling within the ambitof the 1997 Rules.”
2. This question has not been answered by the Division Bench.Instead, the Division Bench went into a completely different question,which was posed as follows:- A
B
C
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E
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G
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SUPREME COURT REPORTS
A“51. Whether an assessee who chooses once to pay duty in termsof Rule 96-ZP(3) can be compelled to pay duty calculated inaccordance with the said Rule for all times to come without anyregard to the actual production is a question which requiresexamination.”
B3. This question was then referred to a larger Bench as follows:-
Issues
“63. Therefore, we find it difficult to accept the submission of therespondent that the issue is covered by the judgments of this Courtin Venus Castings (2000) 4 SCC 206 and Supreme Steels (2001)9 SCC 645. In our opinion, for the reasons mentioned above, theseCtwo judgments require a further examination. Apart from that,these judgments did not deal with vires of Rule 96-ZP(3).However, in view of the fact that Supreme Steels is a decisionrendered by a Bench of three learned Judges, we deem itappropriate that the question of law be settled by a Bench of anappropriate strength. We, therefore, direct the Registry to placeDthe matter before Hon’ble the Chief Justice of India for furtherorders.”
4. Mrs. Nalini Chidambaram, learned Senior Advocate appearingon behalf of the appellant-assessee, states that she came to Courtchallenging the vires of Rule 5 instead of which a completely differentEquestion has been referred to a larger Bench. She further submits thatshe is not, in any way, challenging the fact that an assessee can becompelled to pay duty in terms of Rule 96-ZP(3) without regard to actualproduction which is laid down Section 3A(4) of the Central Excise Act.
5. This being the case, we answer this reference by stating thatthe question posed before us did not arise at all on facts and the questionFwhich has been referred is not something which the assessee disputes.Accordingly, the matter is sent back to a Division Bench to decide thequestions stated in para 20 of Bhuwalka Steel Industries Limited andAnother (supra). The issues other than the issue raised in para 51 ofthe judgment in Bhuwalka Steel Industries Limited and Another (supra)Gmay also be decided in the other tagged matters by the Division Bench.
6. The appeals and the tagged matters be placed before a DivisionBench of this Court.
Ankit GyanH
Matters to be placed before Division Bench.