2012 (8) TMI 290 - AT - Central Excise

Challenge the jurisdiction of the appellate authority - Order passed u/s 3A - AO contested against the belated challenge - Held that - That it is permissible for the petitioners to challenge the validity of the impugned orders on the ground of lack of jurisdiction even at stage though the same had not been raised before the adjudicating authority - after the omission of rules 96ZQ 96ZP and 96ZO of the Rules with effect from 1st March 2001 no proceedings could have been initiated there under and after the omission of section 3A of the Act with effect from 11th May 2001 without any saving clause no pending proceeding under the said rules which had not been concluded before the omission came into effect could be concluded thereafter - in favour of assessee.

Summary

Issues involved:
1. Determination of annual production capacity under Central Excise Act, 1944.
2. Validity of orders passed post deletion of certain rules and sections.

Issue 1: Determination of annual production capacity under Central Excise Act, 1944:

The appeals before the Appellate Tribunal CESTAT, Ahmedabad involved challenges related to the determination of annual production capacity under the Central Excise Act, 1944. The appeals were interconnected and included E/2333/2005, E/2983/2000, and E/2379/2006. The appellant argued that the annual production capacity was determined based on specific provisions of the Act and relevant rules. The appellant cited a judgment by the High Court of Gujarat in a related case, which struck down certain rules as ultra vires. On the other hand, the Revenue contended that the provisions of the Act during the relevant period could still be applied, citing a judgment by the High Court of Madras in a different case. After considering the submissions, the Tribunal noted that the issue revolved around the orders passed post the deletion of specific rules and sections. The Tribunal referred to the judgment of the High Court of Gujarat, which highlighted the invalidity of proceedings conducted after the omission of certain rules and sections. The Tribunal ultimately allowed the appeals filed by the assessee, rejecting the appeal filed by the Revenue.

Issue 2: Validity of orders passed post deletion of certain rules and sections:

The crucial aspect of the judgment focused on the validity of orders passed subsequent to the deletion of Rule 96ZQ, 96ZP, and 96ZO of the Central Excise Rules, along with Section 3A of the Central Excise Act, 1944. The High Court of Gujarat's judgment in the case of Krishna Processors & others established that proceedings conducted after the omission of these rules and sections lacked legal authority and could not be sustained. The High Court emphasized that any actions taken under the deleted provisions were invalid. The judgment highlighted that the absence of a saving clause post the omission of these rules and sections meant that pending proceedings could not be concluded thereafter. The High Court declared the impugned orders as without legal authority and quashed them. The Tribunal, in alignment with the High Court's ruling, allowed the appeals by the assessee and rejected the Revenue's appeal, thereby upholding the principle that proceedings conducted post the deletion of specific rules and sections were invalid.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad provides a comprehensive understanding of the issues involved and the legal implications discussed in the case.