1997 (7) TMI 345 - AT - Central Excise

Summary

Issues:
- Whether a stipulation in a Departmental Trade Notice under Rule 233 of Central Excise Rules, 1944 is a statutory requirement.
- Whether non-compliance with the stipulation can be considered a mere procedural lapse.

Analysis:
1. The Commissioner raised a legal point regarding the status of a stipulation in a Trade Notice issued under Rule 233 of the Central Excise Rules, 1944. The Trade Notice in question required the filing of a D-3 declaration before availing Modvat credit to prevent misuse. The Commissioner argued that non-compliance with this stipulation was not a mere procedural lapse but a deliberate act to defeat the purpose of the Trade Notice.

2. The Tribunal had previously held that the non-compliance with the stipulation was only a procedural lapse. The Appellant Commissioner contended that the respondents failed to comply with Trade Notice No. 20/93-C.E., which required filing a D-3 declaration within 24 hours of receiving certain inputs and melting them in the presence of the jurisdictional Superintendent of Central Excise after giving notice.

3. The Tribunal had already considered whether breaching the stipulation in the Trade Notice amounted to a breach of rules or the Act/Rules. It was held that the requirement to inform the Superintendent before melting was procedural, while the right to take Modvat credit on inputs used in manufacturing was substantive and could not be denied for a procedural lapse.

4. Rule 233 of the Central Excise Rules, 1944 empowers higher authorities to issue written instructions for supplementary matters. The Trade Notice in question was issued under Rule 233, which itself was made by the Central Government under its rule-making power. The judgment emphasized that only rules made by the Central Government under specific sections of the Act have statutory force, and instructions under Rule 233 do not have the same status.

5. The judgment highlighted the principle of delegation of legislative power, stating that a subordinate authority cannot sub-delegate its power. Only rules made by the Central Government under delegated powers have statutory force. Therefore, instructions under Rule 233 do not hold the same weight as rules made under the Act. As a result, the reference application was rejected.

In conclusion, the judgment clarified the distinction between statutory rules and instructions issued under Rule 233, emphasizing that the latter do not have the same legal standing. The decision reaffirmed that substantive rights cannot be denied for procedural lapses and rejected the reference application based on these principles.