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TMI Blog2009 (11) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... Verma, DR, for the Appellant. Shri Alok Arora, Advocate, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (Oral)]. - Heard the learned DR for the appellant and the learned advocate for the respondents. 2. This appeal arises from order dated 11th June, 2004 passed by the Commissioner (Appeals), Meerut. By the impugned order, the appeal filed by the respondents was allowed and the penalty of equal amount of duty imposed by the Additional Commissioner under its order dated 27th March, 2003 was modified and reduced to Rs. 10,000/-. 3. The respondents are engaged in the manufacture of M.S. Ingots falling under Chapter sub-heading 7206.90 of the Schedule to the Central Excise Tariff Act, 1985 and were working under the Compounded Levy Scheme w.e.f. 1-9-1997. 4. The undisputed facts are that : the respondents were required to follow the provisions of Rule 97-ZO of the erstwhile Central Excise Rules, 1944 for the purpose of payment of duty. As per the provisions of law, they were required to pay Central Excise Duty either on their annual capacity of production approved by the Commissioner at 12800 M.T. per annum on which the duty liability being fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force at the relevant time. 7. The learned advocate for the respondents, on the other hand, submitted that, while the proceedings, pursuant to the issuance of the show cause notice, were pending before the adjudicating authority, there were also proceedings pending in relation to the abatement claim put forth by the respondents and it has been subsequently disposed of by the Commissioner under order dated 2nd September, 2008 whereby an abatement of duty under Rule 96-ZO(2) of the said Rules has been allowed for the period 11th August, 1999 to 13th September, 1999 i.e. for 34 days amounting to Rs. 7,55,556/- . The adjudicating authority in relation to the show cause notice dated 8th December, 1999 had passed the order without taking into consideration the pendency of the abatement claim Being so, on this count itself there was no justification for imposing any penalty at all. 8. The learned advocate further submitted that, taking into consideration the provisions of the Finance Act, 2001 and the law iaid down by the Tribunal in the matter of Karnataka Ginning Pressing Factory v. Commissioner of Central Excise, Thane-II reported in 2008 (231) E.L.T. 257 and Asean Aromatics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 3A is continuously closed for not less than 15 days, then pre-payment of duty for the closure period is not to be insisted upon provided the unit has fulfilled all the conditions stated in sub-rule 2 of Rule 96ZO. However, the above claim should be subject to verification by the jurisdictional Assistant Commissioner of Central Excise. If such a closure is for a reasonably long period, periodic verification about the continued closure should be done by the jurisdictional Assistant Commissioner of Central Excise." 12. Plain reading of above quoted clause would disclose that the same can be of help when the period for which the abatement claim coincides with the period in respect of which the default in payment of duty is alleged to have been made and not otherwise. The clause subsequently refers to "then pre-payment of duty for the closure period is not to be insisted upon", which means that the benefit under the said clause can be availed in case the abatement claim is pending in relation to the period for which the Department alleges non-payment of duty and not otherwise. That is not the case in the matter in hand as the abatement claim related to the period prior to 14th Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olice report. In other words, the word 'offence' comprehends any act or omission which is punishable by any law in force and by taking resort to the law in force relating to the criminal procedure. Section 132 under clauses (a), (b) and (c) thereof, nowhere refers to offence or punishment. The same refer to any action taken or anything done or omitted or suit and other proceedings or penalty or fine. The same nowhere indicates reference to the activity in the nature of 'offence' as is specified in Section 17 of the Act. On the contrary, the explanation clause specifically refers to 'punishable as an offence'. Considering the same, the expression offence in the explanation to Section 132 by no stretch of imagination would include a civil wrong. It will essentially relate to an offence in relation to an act omission under the said Act. In other words, in case of any default by the assessee in relation to the duty liability under the Excise Act or the Finance Act, prior to enforcement of Finance Act, 2001, by virtue of Section 132, the pending proceedings would not be validated in relation to the jurisdiction of the authority to impose the punishment for such offence but the same Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the question of maintainability of pending proceedings initiated under a particular provision of the rule after the said provision was omitted the Court is not to look for a provision in the newly added rule for continuing the pending proceedings. It is also not correct to say that the test is whether there is any provision in the rules to the effect that pending proceedings will lapse on omission of the rule under which the notice was issued. It is our considered view that in such a case the Court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari material provision in the statute under which the rule has been framed in that case also the pending proceeding will not be affected by omission of the rule. In the absence of any such provision in the statute or in the rule the pending proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability to pay the interest was held as under : "7. In any event, it is clear from the language of the validation clause, as quoted by us earlier, that the liability was extended not by way of clarification but by way of amendment to the Finance Act with retrospective effect. It is well established that while it is permissible for the legislature to retrospectively legislate, such retrospectively is normally not permissible to create an offence retrospectively. There were clearly judgments, decrees or orders of courts and Tribunals or other authorities, which required to be neutralised by the Validation Clause. We can only assume that the judgments, decree or orders etc. had, in fact, held that persons situate like the appellants were not liable as service providers. This is also clear from the Explanation to the Validation Section which says that no act or acts on the part of any person shall be punishable as an offence which would have been so punishable if the Section had not come into force. 8. The liability to pay interest would only arise on default and is really in the nature of a quasi-punishment. Such liability although created retrospectively could not entail the pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding anything contained in any judgment, decree or order of any court, tribunal or other authority, - (a) any action taken or anything done or omitted to be done, during the said period in respect of any excisable goods under any of such rule, notification or order, shall be deemed to be and shall be deemed to always have been, as validly taken or done or omitted to be done as if the amendment made by Section 131 of the Finance Act, 2001 had been in force at all material times; (b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for taken or anything done or omitted to be done, in respect of any excisable goods under any of such rule, notification or order, and no enforcement shall be made by any court, of any decree or order relating to such action taken or anything done or omitted to be done as if the amendment made by Section 131 of the Finance Act, 2001 had been in force at all material times; (c) recovery shall be made of all such amounts of duty or interest or penalty or fine or credit of duty in respect of inputs or capital goods or other charges which have not been collected or, as the case may be, which have ..... 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