2014 (11) TMI 1110 - AT - Central Excise

Effect of omission of Section 3A - Rule 96 ZQ (ii) of the Central Excise Rules 1944 - SCN issued on 1999 2000-01 and the same remained to be adjudicated - whether the Adjudicating Authority could have proceeded ahead and confirmed the demands after deletion of the provisions of Section 3A of the central Excise Act 1944 and Rules made there under without saving the clause? - Held that - the issue is no more res integra and decided in the case of Krishna Processors 2012 (11) TMI 954 - GUJARAT HIGH COURT where it was held that proceedings which are initiated at the time when the provisions were in statute but terminated subsequently after the deletion/omission are not correct and the said proceeding are liable to be dropped. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Central Excise duty liability under Rule 96 ZQ (ii) of the Central Excise Rules 1944
- Validity of Show Cause Notice issued in 1999, 2000-01
- Interpretation of Section 3A of the Central Excise Act 1944 and related Rules
- Applicability of judgments in similar cases
- Decision on the impugned order

Analysis:

1. Central Excise duty liability under Rule 96 ZQ (ii): The appellant was burdened with Central Excise duty for not discharging duty liability under Rule 96 ZQ (ii) of the Central Excise Rules 1944. The issue revolved around the duty liability and non-compliance with the specified provisions.

2. Validity of Show Cause Notice: The Show Cause Notice was issued in 1999 and 2000-01 but remained unadjudicated until the impugned order was passed on 30th Oct. 2006. The appellant contested the validity of the notice and the subsequent confirmation of demands after the deletion of Section 3A of the Central Excise Act 1944 and related Rules.

3. Interpretation of Section 3A and related Rules: The Tribunal referred to the judgment in Krishna Processors case, emphasizing that proceedings initiated under Rules 96ZQ, 96ZP, and 96ZO of the Rules could not continue after the deletion of Section 3A without a saving clause. The Tribunal highlighted that Rules 96ZQ, 96ZP, and 96ZO are procedural and not charging provisions, and any liability accrues under Section 3A.

4. Applicability of judgments: The Tribunal found that the facts of the current case aligned with the judgment of the Hon'ble High Court, leading to the conclusion that the impugned order was unsustainable. Citing the precedent, the Tribunal set aside the impugned order and allowed the appeal based on the legal principles established in previous cases.

5. Decision on the impugned order: Ultimately, the Tribunal held that the impugned order was unsustainable in light of the legal interpretation of Section 3A and related Rules. Consequently, the impugned order was set aside, and the appeal was allowed, providing relief to the appellant in the matter of Central Excise duty liability under Rule 96 ZQ (ii).