@JUDGMENTTAG-ORDER
Aravind Kumar, J.@mdashHeard Sri Shivadass, learned Advocate appearing for petitioner and Ms. Geetha, learned Advocate appearing on behalf of Sri N.R. Bhaskar for respondents.
2. Petitioner has sought for following reliefs in this writ petition:
"a) Declaring that Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 is illegal, ultra virus and unenforceable;
b) Quash determination orders dated 23-12-1997, 23-12-1997 and 8-3-2000 (Annexures-K, L and M respectively)
c) Directing respondents, their servants and agents not to give effect to Rule 5 of Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 in the case of the petitioner;
d) Directing respondents to determine the annual production capacity of the 1st petitioner company under the provisions of Rule 3(3) of Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 without reference to Rule 5 thereto and collect excise duty based on such determination for the period 1-9-1997 to 31-3-2000;
e) Direct respondents to refund to the petitioner the excess amount of duty over and above the sum payable as determined pursuant to prayer (d) above along with interest at the rate of 24% p.a. from the date of payment to date of refund;
f) Quash circular dated 30-8-1997 (Annexure-F) in so far as it is ultra virus and unconstitutional;"
This petition had been disposed of by a co-ordinate Bench of this Court by order dated 07.12.2005 which was carried in appeal by the petitioner in W.A. Nos. 315/2006 and 4722-23/2011. Division Bench of this Court after considering contentions raised by the respective learned Advocates, by judgment dated 27.09.2013 dismissed the appeals and affirmed the order passed by learned Single Judge.
3. Being aggrieved by the said order, petitioner pursued its grievance before Hon''ble Apex Court by filing SLP (C) No. 3808/2014 and 17219/2014 which was later converted as Civil Appeal Nos. 7823/2014 and 7825/2014. These Civil Appeals were heard along with other connected Civil Appeals by the Hon''ble Apex Court and by order dated 13.08.2014 judgment rendered by this Court in Writ Appeals in W.A. Nos. 315/2006 c/w 4722-23/2011 came to be set aside and all matters came to be restored to the files of respective High Courts for fresh hearing and disposal in accordance with law. It came to be held by Hon''ble Apex Court, as under:
"3. After arguing for some time, learned senior counsel for the parties agree that the High Court ought to have considered the legality and constitutionality of Rule 5 of the Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 (for short, "1997 Rules") as the decision of this Court in "Commissioner of Central Excise, Chandigrah v. Doaba Steel Rolling Mills", (2010) 14 SCC 751, has no application in the present situation. They submit that in Doaba Steel Rolling Mills'' case (supra) the legality and constitutional validity of Rule 5 of 1997 Rules was not put in issue.
4. Learned counsel are right in their submission as the judgment of this Court in Doaba Steel Rolling Mills (supra) (para 20 of the report at page 758) clarifies as under:
"Before addressing the contentions advanced by the learned counsel for the parties, it is essential to note at the outset that in all these appeals, there is no challenge to the validity of Rule 5 of the 1997 Rules inserted vide Notification dated 30-8-1997 and, therefore, we are only required to interpret it and examine the width of its application."
5. In view of the above, the impugned orders are set aside. The writ petitions are restored to the files of the respective High Courts for fresh hearing and disposal in accordance with law."
As could be seen from above said order, matters have been remitted back to this Court in the light of submissions made by the learned Senior counsel appearing for parties namely, in Commissioner of Central Excise, Chandigrah V. Doaba Steel Rolling Mills''s case reported in (2010) 14 SCC 75 there was no challenge to the validity of Rule 5 of 1997 Rules.
4. Perusal of the said order would indicate that legality and constitutionality of Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 was not in issue in Doaba''s case and as such all matters pending before it came to be remitted back. However, order passed by this Court on 7.12.2005 would indicate issue of constitutional validity of Rule 5 was under consideration and judgment of learned Single Judge came to be affirmed on re-appreciation of contentions by Division Bench on 27.09.2013 in W.A. Nos. 315/2006 c/w 4722-23/2011. Though Sri Shivadass, learned Advocate appearing for petitioner would vehemently contend that it was brought to the notice of Hon''ble Apex Court about constitutional validity and vires of the Rules had been challenged by the petitioner before this Court in the present writ petition and same had been adjudicated by learned Single Judge as well as by Division Bench, he submits that on account of other matters having been remitted back to respective High Courts, present petition also landed before this Court, fact of constitutional validity of Rule 5 of 1997 Rules had been considered by this Court cannot be lost sight of.
5. In that view of the matter, I have perused the order passed by this Court dated 07.12.2005 at the first instance. It would suffice if precise contentions raised by the learned Advocate appearing for petitioner is noticed which reads as under:
"5. It is the possibility xxx under Rule 5, the petitioners are all aggrieved and have therefore questioned the legality of Rule 5 of the Determination Rules mainly on two grounds. The first ground is that Rule 5 goes beyond the object and purpose of the provisions of Section 3A of the Act itself; that it is not really in consonance and within the permitted limits as provided in sub-section (2) of Section 3A of the Act and therefore Rule 5 is ultra vires. The second ground of attack is that Rule 5 has the effect of bringing about an invidious classification and the effect of discrimination against persons like the petitioners vis-�-vis persons whose duty liability can be or is being determined only by applying Rule 3 of the Determination Rules. It is on such twin grounds the petitioners have approached this court for a declaration that Rule 5 of the Determination Rules are ultra vires, unconstitutional and while the Rules are to be struck down and the petitioners be permitted to work out the relief consequential on such invalidation and for according the consequential relief to the petitioner."
Co-ordinate Bench of this Court having examined the rival contentions raised, as noticed hereinabove, had concluded as under:
"50. Writ petitions on the ground that Rule-5 of the Determination Rules is ultra vires provisions of the Act or it is discriminatory cannot succeed and the writ petitions are accordingly dismissed. No order as to costs."
In fact, petitioner herein pursued its grievance before Division Bench by filing appeal - W.A. Nos. 315/2006 and 4722-23/2011 before the Division Bench and following question came to be examined by Division Bench of this Court. It reads as under:
"4. The question that falls for our consideration in these appeals is "Whether Rule 5 of the Rules is liable to be declared unconstitutional, violative of Article 14 and/or ultra vires Section 3A of the Central Excise Act, 1944 (for short the "Act")."
Having formulated above referred question, Division Bench examined the contentions raised in this regard and held as under:
"25. In view of the law laid down by the Supreme Court and having regard to the object of Section 3A, we are of the opinion, that Rule 5 cannot be stated to be violative of Article 14 or ultra vires Section 3A. In other words, the differentia or classification, as alleged, have a rational nexus with the object to be achieved by the law. To test this view, we would like to once again refer to the example given by the learned senior counsel for the appellants to emphasis that Rule 5 is discriminatory. Class A manufacturer to whom, according to the appellants, a gross injustice is likely to be done, in our opinion, is also without any substance. Even if it is assumed that provisions contained in Rule 5 make distinction between Class A manufacturer and Class B manufacturer, such distinction cannot be stated to be unconstitutional since we are of the firm view that it has a rational relation to the object sought to be achieved by the Act. If the scheme contained in Section 3A, as we have observed earlier, provides solution to every situation which seems odd such as the one brought to our notice on the basis of the example. Class A manufacturer irrespective of the figures of production for the year 1996-97, 1997-98 and for subsequent years can approach the Commissioner under Sub-section (4) of Section 3A and produce evidence in support of his claim in respect of the actual production if it was lower than the production determined under Sub-section (2) of Section 3A. In other words, apart from the mechanism provided in the proviso to Sub-section (2) and proviso to sub-section (3) under Sub-section (4), the assessee who claims that the actual production of his notified goods was lower than the production determined in Sub-section (2), the Commissioner is empowered to determine the actual production, after giving an opportunity to the assessee to produce evidence in support of his claim and re-determine the amount of duty payable to the assessee with reference to such actual production at the rates specified in Sub-section (3). Further, Sub-section (5) provides refund of duty paid in excess if the Commissioner finds on the basis of the evidence produced by the assessee in support of his claim taking that actual production was lower than the production determined under Sub-section (2) of the Act.
26. If we look at Rule 5 from another angle, we are further satisfied about the view taken by us. Rule provides that if the production during the year 1996-97 was more than the production determined by the formula in Sub-rule (3) of Rule 3 of the Rules, then that has to be taken as the annual capacity for the financial year 1997-98 and the subsequent years. This rule, it seems, was introduced keeping in view the fact that without there being any change in the plant and machinery, including man power, there should not be any reason why factory should have more production in 1996-97 than 1997-98. In other words, without there being any change in the plant and machinery and the other infrastructure including man power, if class ''A'' manufacturer in 1996-97 could produce 150 bars/rods there was no reason for him to produce less number of bars/rods in 1997-98 unless there is a reason and the evidence in support thereof and if there is any such reason or evidence the manufacturer can take recourse to Sub-section (4) of Section 3A of the Act. It was also to check mischief, if any, on the part of manufacturer to show or go for lower/less production to gain an advantage of the scheme. We find that the classification have a rational nexus with the object sought to be achieved by the law. The State, in the exercise of its governmental power, has, of necessity, to make laws operating differently in relation to different groups or class of persons to attain certain ends."
In conclusion, it has been held by the Division Bench that Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 is neither violative of Article 14 of the Constitution of India or ultra vires of the provisions contained in Section 3A of the Central Excise Act, 1944 and thereby dismissed the appeals. Thus, it would clearly indicate that co-ordinate Bench of this Court as well as Division Bench of this Court has dealt extensively with regard to constitutional validity of Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 as noticed hereinabove.
In that view of the matter, question of reexamination of the said issue does not arise. Accordingly, writ petition stands dismissed. No order as to costs.
