In Brief
A steel manufacturer challenged the validity of Rule 5 of the Central Excise 1997 Rules on two grounds: that it was ultra vires the authority conferred by Section 3-A of the Central Excise Act, and that it violated Article 14 by creating two classes of manufacturers with irrational differential tax burdens. The Division Bench, however, referred a different question—whether an assessee can be compelled to pay duty without regard to actual production—which the assessee did not dispute. The Supreme Court clarified that the wrong question was referred and remanded the case to a Division Bench to decide the original constitutional and statutory validity questions raised by the appellant.
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