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2015 (10) TMI 1039 - HC - Central ExciseWhether the provisions of Section 38A of the Central Excise Act, 1944 inserted by Section 131 of the Finance Act, 2001 (validation of action taken has been provided for by virtue of Section 132 of the Finance Act, 2001) shall be applicable in respect of obligation & liabilities incurred under Rules 9620, 96ZP & 96ZQ of erstwhile Central Excise Rules 1944 before the same were omitted, notwithstanding the omission of Section 3A w.e.f. 11.05.2001 - Held that - The proceedings under Section 3A of the Central Excise Act, 1944 read with Rule 96ZQ of the Central Excise Rules, 1944 were initiated by the issuance of a show cause notice dated 13.07.1999. The adjudication order was passed on 22.09.2004. The first appellate authority allowed the assessee s/respondent s appeal by an order dated 07.07.2005. The order of the Tribunal impugned in this appeal was passed on 23.04.2014 - Tribunal dismissed the appeal on the ground that Rule 96ZQ and Section 3A have been omitted on 31.03.2001 and 11.05.2001 and for arriving at this conclusion, theTribunal relied upon the judgment of the Gujarat High Court in the case of Krishna Processors vs. Union of India, 2012 (11) TMI 954 - GUJARAT HIGH COURT . However, there are several Division Bench judgments of this Court which have taken a contrary view. The first judgment was in the case of Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise, Chandigarh, 2006 (10) TMI 17 - HIGH COURT OF PUNJAB & HARYANA (CHANDIGARH) - Decided in favour of assessee.
Issues:
Appeal against CESTAT order, Application of Section 38A of Central Excise Act, 1944 to obligations under erstwhile Central Excise Rules 1944. Analysis: The judgment pertains to an appeal against the order of the CESTAT dismissing the appellant's appeal against the order of the Commissioner (Appeals). The substantial question of law admitted for consideration is whether the provisions of Section 38A of the Central Excise Act, 1944, inserted by the Finance Act, 2001, shall be applicable to obligations and liabilities incurred under Rules 9620, 96ZP, and 96ZQ of the erstwhile Central Excise Rules 1944, despite the omission of Section 3A w.e.f. 11.05.2001. The period of dispute in this case is from 13.01.1999 to 28.02.1999, with proceedings initiated under Section 3A of the Central Excise Act, 1944, read with Rule 96ZQ of the Central Excise Rules, 1944, through a show cause notice dated 13.07.1999. The adjudication order was passed on 22.09.2004, and the first appellate authority allowed the respondent's appeal on 07.07.2005. The impugned order of the Tribunal was issued on 23.04.2014, where the appeal was dismissed based on the omission of Rule 96ZQ and Section 3A on 31.03.2001 and 11.05.2001, respectively. The Tribunal relied on the Gujarat High Court judgment in Krishna Processors vs. Union of India, 2012 (280) ELT 186, for this conclusion. However, the High Court noted conflicting Division Bench judgments, particularly the case of Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise, Chandigarh, 2007 (207) ELT 58, which held that pending proceedings are saved under Section 38A. The High Court, being bound by its previous judgment, ruled in favor of the appellant. Consequently, the High Court answered the question of law in favor of the appellant, allowing the appeal and remanding the matter to the Tribunal for a decision on merits. This judgment highlights the significance of Section 38A of the Central Excise Act, 1944, in preserving pending proceedings despite the omission of specific rules, emphasizing the importance of legal precedents in interpreting and applying statutory provisions in tax matters.
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