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M/s. Bhuwalka Steel Industries Ltd. & Anr. v. Union of India & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 7823 of 2014)Decided 24 Mar 2017
Civil Appeal No. 7823 of 2014
Justice J. Chelameswar · Justice Abhay Manohar Sapre

Background

This is a referral order, not a final judgment. The appeals question the validity of Rules 96ZO(3) and 96ZP(3) of the Central Excise Rules. These rules let manufacturers opt for a flat monthly or lump-sum excise duty instead of duty based on actual production, but bar them from later claiming a refund if actual production was lower than the deemed annual capacity under Section 3A(4). The appellants argued that the rules go beyond the parent Act.

Decision Breakdown

This is a referral order, not a final judgment. The Court examined two of its earlier decisions, Venus Castings and Supreme Steels, which had upheld similar schemes, and concluded that they require a further examination. Because Supreme Steels was decided by a three-judge bench, the Court held that the question of law should be settled by a bench of appropriate strength. It directed the Registry to place the matter before the Chief Justice of India to constitute such a bench.

Lesson Learnt

There is no final ruling yet on the validity of the compounded levy scheme under Rules 96ZO(3) and 96ZP(3). The appellants' claims remain pending until a larger bench settles the question.

Official source (sci.gov.in)View Judgment (PDF)

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