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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7823 OF 2014

M/S BHUWALKA STEEL INDUSTRIES LTD & ANR.           Appellant(s)

                               VERSUS

UNION OF INDIA & ORS.                              Respondent(s)

WITH

C.A. No. 7824/2014  

C.A. No. 7825/2014  

SLP(C) No. 16445/2010  

SLP(C) No. 2014/2009  

T.C.(C) No. 20/2010  

T.C.(C) No. 22/2010  

T.C.(C) No. 23-24/2010  

T.C.(C) No. 34/2010  

T.C.(C) No. 1/2011  

T.C.(C) No. 2/2011  

T.C.(C) No. 3/2011  

T.C.(C) No. 4/2011  

T.C.(C) No. 5/2011  

T.C.(C) No. 106/2015  

T.P.(C) No. 419/2016  

T.P.(C) No. 691/2016  

T.P.(C) No. 1200/2016  

SLP(C) No. 34051/2017

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J U D G M E N T

R.F. Nariman, J.

1) The present reference arises from a judgment of the

Division  Bench  of  this  Court  reported  as  Bhuwalka  Steel

Industries  Limited  and  Another vs.  Union  of  India  and

Others, (2017) 5 SCC 598.  The question before the Court was

set out as follows:-

“20.  The validity of Rule 5 of the 1997 Rules is challenged both before 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  of  India.  Because  the  Rule creates two classes of manufacturers:-

(i) whose ACP is determined to be more than their actual production in the Financial Year 1996-97.

(ii)  Whose  ACP  is  determined  to  be  less  than their  actual production 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 ambit of 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:-

“51. Whether an assessee who chooses once to pay duty in terms of Rule 96-ZP(3) can be compelled to  pay  duty  calculated  in  accordance  with  the said  Rule  for  all  times  to  come  without  any regard  to  the  actual  production is  a  question which requires examination.”

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3) This question was then referred to a larger Bench  as

follows:-

“63. Therefore, we find it difficult to accept the submission of the respondent that the issue is  covered  by  the  judgments  of  this  Court  in Venus  Castings (2000)  4  SCC  206  and  Supreme Steels (2001) 9 SCC 645. In our opinion, for the reasons  mentioned  above,  these  two  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 decision rendered by a Bench of three learned Judges, we deem it appropriate that the question of law be settled by a Bench of an  appropriate  strength.  We,  therefore,  direct the Registry to place the matter before Hon'ble the Chief Justice of India for further orders.”

4) Mrs.  Nalini  Chidambaram,  learned  Senior  Advocate

appearing on behalf of the appellant-assessee, states that

she came to Court challenging the vires of Rule 5 instead

of which a completely different question has been referred

to a larger Bench.  She further submits that she is not, in

any  way,  challenging  the  fact  that  an  assessee  can  be

compelled to pay duty in terms of Rule 96-ZP(3) without

regard  to  actual  production  which  is  laid  down  Section

3A(4) of the Central Excise Act.

5) This  being  the  case,  we  answer  this  reference  by

stating that the question posed before us did not arise at

all on facts and the question which has been referred is

not something which the assessee disputes.  Accordingly,

the matter is sent back to a Division Bench to decide the

questions stated in para 20 of  Bhuwalka Steel Industries

Limited and Another (supra).  The issues other than the

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issue raised in para 51 of the judgment in Bhuwalka Steel

Industries Limited and Another (supra) may also be decided

in the other tagged matters by the Division Bench.

6) The appeals and the tagged matters stand disposed of

accordingly.  

   .......................... J.

       (ROHINTON FALI NARIMAN)

                     .......................... J.   (ANIRUDDHA BOSE)

                     .......................... J.   (V. RAMASUBRAMANIAN)

New Delhi; December 05, 2019.