The main legal point established in the judgment is that the writ petitioners were liable to pay the levy as per the law in force, based on the provisions of Section 3A and Rule 5 of the Amendment Rules, 1997.

The Order of the Court is as follows :-

W.P. No. 14672/97 is filed by Madras Steel Re-rollers Association. Other writ petitions are filed by individual companies. Both the Steel Re-rollers Association and the individual companies have approached this Court to issue a writ of declaration to declare Rule 5 of Hot Re-rolling Steel Mills Annual Capacity Determination (Amendment) Rules, 1997, inserted by Notification No. 45/97-Central Excise (NT), dated 30-8-1997, as ultra vires and contrary to Section 3A of the Central Excise Act, 1944 and to sub-rule (3) of the said Rules. Tamil Nadu Steel Re-rollers Council has filed similar writ petition, namely, W.P. 167 of 1998 seeking similar prayer. Petitioners in W.P. 18792 of 1997 and in W.P. No. 2992 of 2000 question the consequential orders passed by the authorities pursuant to Rule 5 of the Rules referred to above. The petitioners in W.P. No. 17899 of 1997 and 18253 of 1997 challenge the Notification Nos. 27/97 and 33/97, respectively.

2. On the basis of the various averments made in the affidavit as well as contentions, this Court has granted interim injunction and stay as claimed by the petitioners. Aggrieved by the interim orders, the respondents have filed application for vacation of those interim orders. In view of the fact that presently this Court is concerned with the applications for stay, injunction and the other applications filed by the respondents for vacation of those interim orders, it is not necessary for this Court to go into the various contentions raised with regard to the validity of Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination (Amendment) Rules, 1997, inserted by Notification No. 45/97-Central Excise (NT), dated 30-8-1997. However, for the purpose of ascertaining prima facie case, it is but, proper to refer the rival contentions.

3.I have heard Mr. C. Natarajan, Senior Counsel, Mr. A.L. Somayaji, Senior Counsel, Mr. Arvind P. Dattar, Senior Counsel, Mrs. Pushpa Seetharaman, learned Counsel for the petitioners and Mr. K. Veeraraghavan, Additional Central Government Standing Counsel. The members of the petitioner association as well as the other petitioners, who are individual companies-Re-rolling Mills manufacture MS Rods, Tor Steel, Angles, Channels, Flats, Squares, etc., from ingots and billets. The product manufactured by the petitioners is an excisable commodity and therefore they took out registration under the Central Excise Act (hereinafter referred to as 'the Act'). Excise is a duty on excisable goods manufactured or produced in India. The Act provides for charging of duty, valuation and the procedure for recovery etc. The Central Excise Rules framed under the powers vested under Section 37 of the Act prescribe the procedures, forms, etc. The rate of duty for each excisable goods is prescribed under the Central Excise Tariff Act. Notifications are issued from time to time reducing the rate of duty or granting exemption. The Central Government introduced a system of levying excise duty based on the annual production capacity. On 25-7-1997 the first Respondent introduced the system for levying excise duty on the production capacity of factories and thus introduced Section 3A in the Act. By introduction of the new system under Section 3A of the act read with Rules, an assessee has to pay excise duty on the annual production capacity so determined and arrived at basing on the formula prescribed under the said Rules read with Rule 5. The Government of India, the first respondent herein, by Notification No. 45/97, Central Excise (NT), dated 30-8-1997, inserted Rule 5 amending the said Rules. Rule 5 (inserted by Notification No. 45/97-C.E. (N.T.) dated 30-8-1997 :-

"In case the Annual capacity determined by the formula in Sub-Rule (5) of Rule 3 in respect of a Mill, is less than the actual production of the Mill during the financial year 1996-97, then the annual capacity so determined shall be deemed to be equal to the actual prod