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TMI Blog2006 (3) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise, Bangalore-II vide Order No. 9/2000 dated 14-3-2000 had already fixed Annual Capacity of Production finally for the impugned period and there was no need to determine the same again. It is seen that the Revenue has not got the referred final order No. 1755/03 dated 30-12-2003 of the Tribunal. Hence, the remand order of the Tribunal holding that the assessments were provisional is required to be upheld now. 2. The contention of the appellant is that the demands are not sustainable, as the section 3A of the CE Act has been deleted with effect from 11-5-2001 without saving clause provided in Section 121 or any other Section of Finance Act, 2001 and therefore, the proceedings cannot be initiated and demands confirmed in terms of show cause notice in the impugned order. It is submitted that Rule 97ZO and Rule 97ZP are subordinate legislation relatable to the parent provision viz., 3A and the same is obliterated from the statute board. The demands confirmed by the Commissioner are not sustainable in law. In this regard, the Tribunal ruling of West Zonal Bench (WZB) in the case of Mitra Steel Alloys Pvt. Ltd. vide Order No. A/1444-1446/WZB/2005 dated 12-8-2005, in an identic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Commissioner of Central Excise, Bangalore-II Commissionerate, Bangalore, it is to submit that the said OIO came to be passed pursuant to the directions contained in the Final Order No. 1755/2003 dated 30-12-2003 of the Tribunal, wherein the matter has been remanded to the Commissioner to decide the case de novo. The decision of the Tribunal to remand the case was prompted due to the claim of the appellant that the jurisdictional Deputy Commissioner had confirmed the demand of duty in his Order-in-Original No. 252/2000 dated 20-12-2000 based on the Annual Capacity of Production (hereinafter referred to as the ACP) fixed provisionally as per the communication dated 19-3-1998 received from the Assistant Commissioner of Central Excise (Tech), Hqrs., Bangalore-II Commissionerate. However, it is on record that the ACP had been finally determined by the Competent Authority i.e., the Commissioner of Central Excise, Bangalore-II Commissionerate, Bangalore as per the Order No. 09/2000, dated 14-3-2000 and the said order had been served on the appellant on 18-3-2000 as is evident from the postal acknowledgement card. There is also a reference regarding the fixation of the ACP on final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt have contended that the adjudicating authority i.e., Commissioner should have determined the Annual Capacity of Production on final basis in obedience to the Tribunal s Final Order No. 1755/2003 dated 30-12-2003; that if the Final Order had been passed by the then Commissioner on 14-3-2000 and the appellant have not brought the same to the notice of the Tribunal during the course of appeal proceedings, the Commissioner could have filed an application for recalling the Tribunal s Order or asked for rectification of mistake. However, in the present case the fact remains that the then Commissioner had determined the ACP on final basis as per order dated 14-3-2000 and the same had been duly served on them on 18-3-2000. The appellant have not disputed the above facts. In such circumstances, the appellant should have brought the above facts to the notice of the Hon ble Tribunal and allowed the Tribunal to decide the appeal on merits, instead of suppressing such facts and get the case remanded back to the Commissioner. If the request of the appellant to determine the ACP again as per the directions contained in the Tribunal s Order is acceded to, the same may result in fixation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner has proceeded to confirm the demand of duty of Rs. 64,72,027/- and charge interest as proposed in the impugned Show Cause Notices. These facts are also brought out clearly at para 9 of the Order-in-Original No. 02/2004 dated 31-3-2004 passed by the Commissioner. Para J:- In view of the above reasons, more specifically the dismissal of the Appeal (No. E-609/2004) and the application for condonation of delay (No. 305 of 2004) (filed before the Tribunal against the Order No. 09/2000, dated 14-3-2000 of the Commissioner of Central Excise, Bangalore-II Commissionerate, Bangalore fixing the ACP on final basis) vide., Final Order No. 1493/2004 and Misc. Order No. 760/2004, both dated 22-9-2004, the present appeal of the appellant bearing No. E/610/2004 has become infructuous and is liable to be rejected outright. 4. On a careful consideration, we notice that the Tribunal has clearly held that the charging Section 3A has been omitted with effect from 11-5-2001 by Finance Act 2001 without saving clause. Both the rules 97ZO and 97ZP come within the ambit of Section 3A. It has been clearly noted in Para 2.1 (8) that once Section 3A has been omitted then Rule 97ZO seizes to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omission of Section 3A rule 96ZO. Considering the submissions, it is to be held- (i) The common law rule is that if an Act expired or was repealed it was regarded, in absence of provision to the contrary, as having never existed, except as to matters and transactions past and closed. Refer Craies on Statute Law - pages 351-354 . Maxwell on The Interpretation of Statutes . (ii) With a view to avoid such an effect, savings clause to be enacted is necessary. (iii) Section 3A of the Central Excise Act, 1944 has been Omitted vide Section 121 of the Finance Act, 2001, with effect from May 11, 2001- There is no, saving clause provided in Section 121 or any other section of the Finance Act, 2001. (iv) It has been settled by following two judgments of Constitution Bench of Supreme Court that Section 6 of the General Clauses Act, 1897 does not apply to a case of omission , (a) Rayala Corporation (P) Ltd. v. Director of Enforcement, New Delhi [1969 (2) SCC 412] at para 17 page 424 (b) Kolhapur Canesugar Works Ltd. v. Union of India [2000 (2) SCC 536] at para 32 34 page 549 550 The above two judgements have been followed by Supreme Court in Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision (Section 3A), the subordinate legislation (Rule 96ZO and the 1997 Rules) relatable to the parent provision, cease to have any legal validity because the source of power (namely Section 3A) is itself obliterated. (ix) The above view finding is fully supported by the decision of Supreme Court in Air India v. UOI - 1995 (4) SCC 734, wherein the Supreme Court held that once a parent statute is repealed, the sub-ordinate legislation no longer survives. The Supreme Court held that - if sub-ordinate legislation is to survive the repeal of its parent statute, the repealing statute must say so in so many words and by mentioning the title of the Subordinate Legislation. In the present case, the repealing Act i.e. Finance Act, 2001 do not contain any specific provision saving the sub-ordinate legislation i.e rule 96ZO which in any case was omitted with effect from 1-3-2001, The in-built saving clause, in Notification no. 6/2001-CE(NT) dated 1-3-2001. cannot come to the rescue of the Revenue. That saving clause would be relevant only when the mother provision, namely Section 3A, was alive and in force. The Supreme Court has specifically held that sub-ordinate legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment and levy/charge of interest on period of such delay, as enacted in the rule 96ZO is not found to be supported by or could be shown to be derived from any power under the Act. The proviso of rule 96ZO(3) providing for interest in ultra vires the delegated power of rule making granted under the Act. (f) Similarly, examining the plea on penalty provisions, under rule 96ZO(3) it is found- (i) It is axiomatic that penalty is a substantive and fiscal liability and can be legislated only by plenary legislation, namely by Parliament or State Legislature, as the case may be. (ii) In addition, in the present case, there is no provision, express or implied, in the Central Excise Act, enabling the rule making authority namely the Central Government to frame the rules to implant a Scheme under Section 3A of the Act as contained in Rule 96ZO(3) relating to levy of penalty, for delay in payments. (iii) Section 37(1) of the Central Excise Act, 1944 enables Central Government to frame rules to carry into effect the purposes of the Act. It is settled law that this general power of delegation cannot confer power on the delegated authority to make rules for imposing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t provide for confiscation if monthly payment as required under Rule 96ZO(3), is not made. Therefore, this Section 37(5) is not relevant at all for judging the source of legislating of penal provisions contained in Rule 96ZO(3). Therefore, we find no delegation of powers, to make a provision of penalty in rule 96ZO(3) the same as notified is to be held as ultra-vires the power delegated to frame rules under the Central Excise Act, 1944. (g) Once we find that the provision of rule 96ZO(3) as regard interest penalty are ultra-vires, the delegated powers conferred under the Act, the same are required to be struck-down by denying the powers to do so. The powers to be hold ultra vires and strike down provision of delegated rules is derived on a reading of the Supreme Court decision in case of Chandra Kumar v. UOI [1997 (92) E.L.T. 319 (S.C.)], para 26, 88, 91 97 thereof, and the position settled therein, that this Tribunal is constituted under Article 323B of the Constitution. (h) Proceeding under a provision being suike down as ultra-vires cannot be upheld. 3. In view of the findings arrived, we find that the amounts as determined on the appellant cannot be upheld f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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