JAMMU CASTING PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) In this Intra Court Appeal, the appellant has assailed the validity of order dated 8-10-2010 passed by the learned Single Judge, by which the writ petition preferred by the appellant has been dismissed and the plea of appellant that Rule 96ZO(3) of the Central Excise Rules, 1944 (hereinafter referred to as the Rules of 1944) and Section [3A] of the Central Excise Act, 1944 be held ultra vires the Constitution, was rejected. In order to appreciate the grievance of the appellant, few facts need mention, which are stated infra.

(2.) The appellant is engaged in the manufacture of M.S. Ingots/billets falling under sub-headings 7206.90 and 7207.90 of the Schedule of Central Excise Tariff Act, 1985 and are chargeable to duty in terms of Section 3 of the Central Excise Act, 1944 read with Notification No. 30/97-C.E. (N.T.), dated 1-8-1997. The appellant by communication dated 4-8-1997 opted to pay duty in terms of Rule 96ZO(3) of Central Excise Rules, 1944. The Commissioner of Central Excise, Chandigarh-II vide order dated 11-11-1997 initially determined the annual capacity production of the unit as 9600 MT under Rule 3(4) of Induction Furnace Annual Capacity Determination Rules, 1997 (hereinafter to be referred as the Rules of 1997). The appellant vide communication dated 30-6-1999 intimated to the Commissioner of Central Excise regarding erection of a new electric furnace of 4 MT.

(3.) The appellant started commercial production on new furnace of 4 MT on 1-10-1999. Thereafter, by communication dated 20-9-1999, the appellant intimated regarding commissioning of new furnace of 4 MT in place of 3 MT and further stated that they shall be using one of the old crucible, i.e., 3 MT as stand by. After the commissioning of new 4 MT furnace, the unit started commercial production of non-alloy steel ingots through 4 MT furnace with effect from 1-10-1999 but one of the crucibles already existing furnace of 3 MT capacity was got sealed. The other crucible of 3 MT furnace was left unsealed to serve as stand by to the new 4 MT furnace. The appellant vide communication dated 15-12-1999 sought permission to unseal the old 3 MT furnace, pursuant to which the aforesaid furnace was unsealed on 21-12-1999 while 4 MT furnace was simultaneously sealed. On 1-3-2004 MT furnace was unsealed and 3 MT furnace was sealed simultaneously.