Rule 8(3A) of Central Excise Rules already struck down as Ultra Vires by several HCs: Jharkhand HC Disposes Appeals [Read Order]

The High Court of Jharkhand disposed of an appeal wherein it was held that Rule 8(3A) of the Central Excise Rules, 2002 already has been struck down as ultra vires by several other High Courts.

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The fact that needs mentioning is that the tax effect is less than two crore rupees. It has been submitted that since the issue relates with the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, the matter would fall within the exception in paragraph 2(a) of Instructions dated 02.11.2023.

Paragraph 2(a) of Instructions dated 02.11.2023 provides that adverse judgments where the constitutional validity of the provisions of an Act or Rule are under challenge, should be contested irrespective of the amount involved.

The High Court observed that the issue of constitutional validity of Rule 8(3A) cannot be said to be involved. The bench noted that the Rule is already struck down as ultra vires by several High Courts, as was admitted by the counsel for the appellants.

Chief Justice M.S. Sonak and Justice Rajesh Shankar commented that even the so-called substantial question of law proposed by the appellants does not raise the issue of constitutional validity of Rule 8.

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Accordingly, they disposed of the appeals on the ground of low tax effect by leaving the questions of law open. Attention was drawn to the terms of Instructions wherein the Department is not expected to pursue appeals where tax effect is less than two crores.

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