2008 (6) TMI 219 - HC - Central Excise

Summary

Issues involved: Challenge to Show Cause Notice u/s Rule 57U(2) of Central Excise Rules, 1944; Applicability of substituted Rule from 31-3-2000; Effect of Finance Act, 2001 on proceedings.

Summary:

The High Court of Gujarat at Ahmedabad addressed a petition challenging a Show Cause Notice dated 14-7-1999 issued to a company u/s Rule 57U(2) of the Central Excise Rules, 1944. The petitioner argued that as the Rule had been substituted without a saving clause, the Notice should be declared inoperative. The petition was admitted based on legal precedent.

During arguments, it was revealed that the Finance Act, 2001 had inserted Section 38A in the Central Excise Act, 1944 with retrospective effect from 28-2-1944. Additionally, validation of actions taken was provided for under Section 132 of the Finance Act, 2001.

Considering the legal position, the Court found that the challenge raised by the petitioner was no longer valid. However, since proceedings were stayed, the Court issued directions for the petitioner to submit a written reply to the Show Cause Notice within one month. The respondent authority was directed to proceed with the Notice in accordance with the law after giving proper opportunity to the petitioner.

Ultimately, the petition was rejected, rule discharged, and interim relief vacated, with no order as to costs.