1990 (8) TMI 154 - HC - Central Excise

Summary

Issues:
Challenge to order rejecting appeal against duty demand and subsequent demand made by the tax authority.

Detailed Analysis:

1. Background and Facts:
- Two writ petitions were filed challenging an order rejecting an appeal against a duty demand and a consequent demand made by the tax authority.
- The petitioners operated a Rolling Mill converting Aluminum Ingots into Redraw Rods, licensed under Central Excise Rules, 1944.
- A shortage of aluminum ingots was alleged during an inspection, leading to a duty demand.
- After multiple notices and replies, the third respondent held the petitioners liable for duty on the alleged shortage.

2. Legal Contention by Petitioners:
- The petitioners argued that the proceedings and demand were without jurisdiction due to the omission of certain rules.
- They contended that the time limit for proceedings had lapsed and the department failed to provide necessary averments in the show cause notice.

3. Response by Central Government Standing Counsel:
- The counsel for the respondents argued that the proceedings were in accordance with the law, citing violations of excise rules by the petitioners.
- It was asserted that there was no time limit for the duty demand under the relevant rules.

4. Judicial Analysis and Decision:
- The judge considered various legal precedents and concluded that the proceedings initiated after the omission of rules were without jurisdiction.
- Emphasized that the repeal of rules had drastic consequences, and no proceedings could be continued under the repealed provisions.
- Rejected the argument that rules made under a statute could be treated as if enacted in the Act, stating that they do not lose their subordinate legislative nature.
- Quashed the impugned proceedings and allowed the writ petitions, with no order as to costs.

5. Conclusion:
- The judgment focused on the jurisdictional aspect of the proceedings, highlighting the impact of the omission of rules on the legality of the demands made by the tax authority.
- By analyzing legal principles and precedents, the court ruled in favor of the petitioners, setting aside the proceedings and demands due to lack of jurisdiction post the omission of relevant rules.