M/S BHUWALKA STEEL INDUSTRIES LTD. & ANR. versus UNION OF INDIA & ORS.

Citation: [2019] 15 S.C.R. 16 · Decided: 05-12-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Directions issued
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 15 S.C.R.
M/S BHUWALKA STEEL INDUSTRIES LTD. & ANR.
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 7823 of 2014)
DECEMBER 05, 2019
[R. F. NARIMAN, ANIRUDDHA BOSE AND
V. RAMASUBRAMANIAN, JJ.]
Central Excise Act, 1944 – S.3A – Central Excise Rules, 1944
– r.96-ZP(3) – Hot Re-Rolling Steel Mills Annual Capacity
Determination Rules, 1997 – r. 5 – Validity of r. 5 – The question
before the Division Bench of Supreme Court in Bhuwalka Steel
Industries Ltd. was regarding the validity of r.5 of the 1997 Rules –
This question was not answered and instead the Division Bench
went into a completely different question i.e. vires of r. 96-ZP (3)
and same was referred to the Larger Bench – Appellant-assessee
stated that they were only challenging the vires of r.5 and were not
challenging the fact that an assessee can be compelled to pay duty
in terms of r.96-ZP(3) without regard to actual production which is
laid down s.3A(4) of the Central Excise Act – Held: The question
posed before the Larger Bench did not arise on facts and the question
which was referred is not something which the assessee disputes –
Accordingly, the matter sent back to a Division Bench to decide the
questions stated in para 20 & issue raised in para 51 of  Bhuwalka
Steel Industries Ltd. and Anr.
Bhuwalka Steel Industries Limited and Another v. Union
of India and Others, (2017) 5 SCC 598 – referred to.
Case Law Reference
(2017) 5 SCC 598
 referred to
Para 1
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7823
of 2014.
From the Judgment and Order dated 27.09.2013 of the High Court
of Karnataka at Bangalore in Writ Appeal No. 315 of 2006.
 [2019] 15 S.C.R. 16
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With
Civil Appeal Nos. 7824, 7825 of 2014, S.L.P.(C) Nos. 16445 of
2010, 2014 of 2009, 34051 of 2017, T.C. (C) Nos. 20, 22, 23-24, 34 of
2010, 1, 2, 3, 4, 5 of 2011, 106 of 2015, T.P. (C) Nos. 419, 691, 1200 of
2016,
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. Anil
Katiyar, 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 Mohan
Sharma, 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.
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 andOthers, (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:-
M/S BHUWALKA STEEL INDUSTRIES LTD. & ANR. v. UNION
OF INDIA & ORS.
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SUPREME COURT REPORTS
[2019] 15 S.C.R.
“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.”
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 Benc
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