2013 (11) TMI 784 - AT - Central Excise

Demand of Duty under rule 96 ZQ of central excise act 1944 Hot Air Stenter Independent Textile Processors Rules - Held that - In view of the language contained in the notification dated 1st March, 2001, the same can only afford protection to action already taken while Rule 96ZQ was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist - Any obligation or liability etc. acquired, accrued or incurred under Section 3A of the Act would not be saved by Section 6 of the General Clauses Act. When the charging Section itself is deleted without any saving clause, no recovery under the said Section can be made by resorting to Rule 96ZQ of the Rules. Action, if any, can be taken only under the regular provisions of the Act - in case of proceedings initiated prior to the omission of Rule 96ZQ, 96ZP and 96ZO of the Rules, if the same were not concluded prior to the omission of Section 3A of the Act, there was no power to proceed further and conclude the same - any action taken under Rules 96ZQ, 96ZO and 96ZP of the Rules after Section 3A of the Act came to be omitted from the statute book without any saving clause, would be without authority of law and as such any orders passed in respect thereof after the omission of Section 3A of the Act would be non est. Virus of penalty provision - Held that -Manufacturers of goods specified under Section 3A of the Act are evidently subjected to harsh treatment of unreasonable penalty under Rule 96ZQ(5)(ii) compared to manufacturers of other excisable goods Decided in favour of Assessee.

Summary

Issues involved:
Duty liability under Hot Air Stenter Independent Textile Processors Rules for the period 01.04.2000 to 23.11.2000, challenge to the vires of rule 962Q, demand of duty and penalties under various rules, interpretation of relevant legal provisions, impact of the judgment in Krishna Processors Vs. Union of India, consideration of Supreme Court's decision in Union of India v. Supreme Steels, lack of jurisdiction on the part of the adjudicating authority.

Analysis:

1. Duty Liability and Challenge to Rule 962Q:
The case involves the duty liability on the appellant under the Hot Air Stenter Independent Textile Processors Rules for a specific period. The appellant challenged the vires of rule 962Q before the High Court of Gujarat, citing the case of Krishna Processors Vs. Union of India, where the High Court struck down the said rules as ultra vires. The issue revolved around the demand of duty and penalties under various rules, including rule 962Q. The Tribunal noted the submissions made by the counsel and the relevant legal provisions in question.

2. Interpretation of Legal Provisions:
The Tribunal analyzed the provisions of Rule 96ZQ in detail, which outlined the procedure for independent processors of textile fabrics. The rule specified obligations regarding duty payment, maintenance of records, payment deadlines, interest, and penalties for defaults. The Tribunal considered the implications of the omission of Rule 96ZQ and Section 3A of the Act on the ongoing proceedings and the authority of the adjudicating body to continue with the cases.

3. Impact of Previous Judgments:
The Tribunal discussed the relevance of the judgment in Krishna Processors Vs. Union of India and the decision of the Supreme Court in Union of India v. Supreme Steels. The Supreme Court's decision primarily focused on the vires of Rule 96ZO and Section 3A of the Act, indicating that the challenge was not pursued due to a consensus between the parties. The Tribunal examined the arguments raised by both sides and the implications of these decisions on the present case.

4. Lack of Jurisdiction Issue:
A crucial aspect of the case was the contention regarding the lack of jurisdiction on the part of the adjudicating authority due to the deletion of certain rules and provisions. The Tribunal referred to legal precedents emphasizing that a defect of jurisdiction goes to the root of the matter and can be raised at any stage. The Tribunal considered the implications of the lack of jurisdiction on the validity of the impugned orders and the authority of the adjudicating body to pass judgments.

5. Tribunal's Decision:
Based on the analysis of the legal provisions, previous judgments, and the lack of jurisdiction issue, the Tribunal concluded that the impugned order was liable to be set aside. The appeals were allowed, and consequential relief was granted accordingly. The Tribunal's decision was based on the interpretation of relevant laws, precedents, and the fundamental principles of jurisdiction in legal proceedings.

This detailed analysis of the issues involved in the judgment highlights the legal complexities, interpretations of statutes, and the impact of previous decisions on the final outcome of the case.