Case Law Analysis
|Calcutta High Court
Section 3A Central Excise Act | Capacity-Based Taxation Valid Despite Disconnect from Actual Output : Calcutta HC Upholds Deeming Fiction to Curb Evasion
Calcutta High Court ruled that excise duty levied on production capacity under Section 3A of the Central Excise Act need not align with actual output, provided the mechanism serves the legislative intent to prevent tax evasion. The judgment validates the use of 'deeming fiction' in taxation, impacting manufacturers of notified goods like chewing tobacco.