BEAUTY DYERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Order of the Court is as follows :- In all these writ petitions, the petitioners challenge certain clauses of notifications issued exercising powers conferred by sub-section (3) of Section 3 of the Central Excise Act, 1944 with reference to determination of independent textile processing annual capacity and the rate of excise duty on processed textile fabrics and amendments regarding the same.

(2.) SECTION 3 of the Act is a charging SECTION under which there shall be levied and collected the excise duty in such manner as may be prescribed at the rate specified in the Schedules to the Central Excise Tariff Act, 1985. Sub-section (2) to SECTION 3 of the Act gives power to the Central Government to issue notification to fix the tariff values of any articles for the purpose of levying excise duties. The Parliament enacted and introduced new provision. SECTION 3A of the Act under which the Central Government was empowered to charge with excise duty on the basis of capacity of production in respect of notified goods. Under the said provision, notwithstanding anything contained in SECTION 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of SECTION 3A of the Act. From the above said provision, it is clear that with respect to the notified goods, the Central Government can levy and collect excise duty on the basis of capacity of production.

(3.) THE learned Additional Solicitor General while defending the validity of the said rules has submitted that the method contemplated under the rules had been followed uniformly and so the petitioners cannot have any grievance. According to him, the annual capacity of production was taken into consideration not only on the basis of number of chambers, but also the average value of production. He has also submitted that in the matter relating to economic measures, the Court adjudged the constitutionality of the legislation by its own equalities or only by possibilities of abuse of any of its provision. According to the learned Addl. Solicitor General, the petitioner cannot rely on the other rules with respect to the other commodities framed under Section 3A of the Act to say that the rules in question are bad in law. It is his further submission that by the impugned rules, the authorities are able to arrive at the annual capacity of production of the various factories and so the question of challenging the same may not arise.