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TMI Blog2000 (2) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... er the new provision in accordance with the terms thereof. From the contents of the provisions in the Rules it is clear that it did not contain any saving clause for continuance of the proceeding initiated under the rule which was deleted/omitted. There is also no provision in Section 11A or in any other Section of the Act saving the proceedings initiated under the deleted/omitted provision. The consequential position that follows is that the proceeding lapsed after 6th August 1977 and any order passed in the proceeding thereafter is to be treated as non-est. In case the notice was issued after Section 11A was introduced in the Act, the proceeding will continue and will not be affected by this decision. - S.P. Bharucha, B.N. Kirpal, V.N. Khare, D.P. Mohapatra and N. Santosh Hegde, JJ. Shri G. Ramaswamy, B. Datta, Kapil Sibal, K.N. Bhat, and C.S. Vaidyanathan, Additional Solicitor Generals, F.S. Nariman, R.F. Nariman, Joseph Vellapalli, H.N. Salve, K. Parasaran, T.S. Krishnamurthy Iyer, Soli J. Sorabjee, V.P. Sarthy, Sr. Advs., P.H. Parekh, S.C. Sharma, D.M. Popat, Ms. Bina Madhavan, Ms. Jankhana Bagadia, (Ms. Gauri Rasgotra, Ms. Purnima Singh, Suman J. Khaitan,) Advs. for M/s. Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e season 1973-74. They were informed by the Superintendent, Central Excise, Kolhapur by letter 23-9-1974 that their factory did not figure in the list of new factories; therefore, they did not come within the scope of the Notification No. 189/73 and they would not be entitled for the sugar incentive rebate on excise duty on account of excess production of sugar for the year 1973-74 season. 5. On 7-12-1974, the appellant applied for rebate on excess production for the year 1974-75 on the basis of the Notification No. 146/74, dated 12-10-1974. This claim of rebate was for the amount ₹ 6,53,472/- on excess production of sugar within two months, October and November, 1974. The Superintendent, Central Excise, Kolhapur by his letter dated 26th May, 1975 informed the appellants that since a fresh L-4 license was issued to them, their factory will have to be treated as a new unit, and therefore, the rebate claim filed as an old unit could not be entertained. 6. Subsequently, the appellants made an application for grant of incentive rebate on the sugar manufactured by them in terms of the Notification No. 189/73, dated 4th October, 1973. This rebate claim was scrutinized and after pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory and that they commenced manufacturing of sugar for the first time after 1-10-1973. M/s Kolhapur Cane Sugar Works Ltd., Kolhapur, do not thus appear to be entitled to the rebate sanctioned to him as a new factory. Whereas it appears that M/s Kolhapur Cane Sugar Works Ltd., Kolhapur are not eligible to rebate for the season 1973-74 under any other provisions of the Notification No. 189/73 dated 4-10-1973. 2. Now therefore M/s Kolhapur Cane Sugar Works Ltd., Kolhapur are hereby required to show cause the Assistant Collector, Central Excise, Kolhapur, why the rebate of ₹ 61,14,930/- erroneously sanctioned and allowed to be credited to their PLA by the Superintendent under his letter No. Rebate/ KCW/73-74/76 dated 23-7-1973, should not be recovered from them under Rule 10A of the Central Excise Rules, 1944. 3. M/s the Kolhapur Cane Sugar Works Ltd., Kolhapur, are further directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence. 4. M/s Kolhapur Cane Sugar Works Ltd., Kolhapur should indicate in the written explanation whether they wish to be heard in person before the case is decided. If no mention is made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant the order passed after August, 1977 could not invoke the old Rule 10 which had been omitted. The High Court repelled these contentions and dismissed the petition. 11. When this appeal and the connected appeals came up for hearing before a bench of two learned judges of this Court the Bench considering the submissions made by the counsel appearing for the appellants took the view that having regard to the importance of the questions involved the matter should be considered by a Constitution Bench. The relevant portion of the Reference order dated 11-9-1997 is quoted hereunder : Shri F.S. Nariman the learned Senior Counsel appearing for the appellants in Civil Appeal No. 2132/94, has placed reliance on the decision of the Constitution Bench of this Court in Rayala Corporation (P) Ltd. Ors. v. Director of Enforcement, New Delhi, 1970. (1) SCR 639. In that case this Court was dealing with the provisions of Rule 132A of the Defence of India Rules, 1962 and it was held that the provisions of Section 6 of General Clauses Act could not be made applicable to the repeal of the Rules and that the said provisions are applicable only to the repeal of a Central Act or Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date on which he is required to pay within the period specified. 14. Rule 10A contained the provision regarding residuary powers for recovery of sums due to Government where the Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty or of any other sum of any kind payable to the Central Government under the Act. The procedure laid down in this rule was similar to Rule 10 i.e. issue of a show-cause notice for determination of the amount due, etc. 15. Rules 10 and 10A were omitted and a new provision was introduced by Rule 10 with effect from 6th August, 1977. In the said Rule a period of 6 months was prescribed for initiating action for realization of the duty which has not been levied or paid or has been short-levied, erroneously refunded or any duty assessed has not been paid in full. No provision regarding residuary power was made in the Rules. 16. Section 11A which was inserted with effect from 17-11-1980 vide Notification No.182/80-C.E., dated 15-11-1980, by Section 21 of the Customs, Central Excise and Salt and Central Board of Revenue (Amendment) Act, 1978 (25 of 1978) reads as follows : 11A. Recovery of duties not levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture of punishment may be imposed as if the repealing Act or Regulation had not been passed. 18. The term Central Act has been defined in Section 3(7) which shall mean an Act of Parliament; and shall include (a) an Act of the Dominion legislature or of the Indian legislature passed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting and introducing these rules, and as Section 6 of the General Clauses Act did not help as this is a case of the omission of rules and not of their repeal, the pending proceedings under old Rule 10 could not be continued and could not be adjudicated upon under new Rule 10 by the departmental authorities. Consequently, the proceedings pending for adjudication under show cause notices under old rule prior to 6-8-1977, became incompetent after 6-8-1977. Reliance was placed on the decision in Rayala Corporation (supra). The High Court after considering the effect of omission of Rules 10 and 10A with effect from 6-8-1977 and the subsequent enactment of Section 11A of the Central Excise and Salt Act, 1944 observed that it is pertinent to note that while enacting new Rule 10, sub-rule (2) was enacted which in terms provided that the Assistant Collector shall after considering the representation, if any, made by the person on whom notice is served under sub-rule (1) determine the amount of duty from such person; it, therefore, clearly contemplates that the Assistant Collector under new Rule 10 had to adjudicate upon the notice served under sub-rule (1) of new Rule 10; no power is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral Clauses Act was relied in support of the view. This Court summed up the finding in these words (Para 11) : We are, therefore, of the view that the Inspecting Assistant Commissioner did not lose the Jurisdiction to continue with the proceedings pending before him on 31-3-1976 by virtue of the deletion of sub-section (2) of Section 274 by the Taxation Laws (Amendment) Act, 1970 with effect from 1-4-1976. He was entitled to continue with those proceedings and pass appropriate orders according to law. 28. The applicability of Section 6 of the Act to the case was not questioned in the case. Therefore, the decision should be read in the context of the facts of the case. It has no general application. 29. In the case of S. Krishnan v. State of Madras (AIR 1951 SC 301) this Court held that the general rule in regard to a temporary statute is that in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso-facto terminate as soon as the statute expires. The Constitution Bench of this Court considering the provision of the Preventive Detention (Amendment) Act, 1951, the constitutional validity of Sections 9(2) and 12(1), he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision from which it could be gathered that the provision in the Act at the time of repeal indicate that the legislature intended otherwise than what is provided in the Section 6 of the General Clauses Act. In that case the applicability of Section 6 to the case was not in question as the relevant provisions of the statute were omitted by a Central enactment. The decision is distinguishable. 31. The Allahabad High Court in the case of Ajanta Paper Products, Ratanpura, Agra v. Collector of Central Excise, Kanpur [1982 (E.L.T.) 201 (All.)] also took a similar view. 32. We have carefully considered the decisions in Saurashrta Cement and Chemical Industries (supra) and Falcon Tyres case (supra). Though the judgments in these cases were rendered after the decision of the Constitution Bench in Rayala Corporation Pvt. Ltd. (supra) a different view has been taken by the High Courts for the reasons stated in the judgments. The Full Bench of the Gujarat High Court in Saurashtra Cement and Chemical Industries (supra), as it appears from the discussions in the judgment, tried to distinguish the decision of the Constitution Bench in M/s. Rayala Corporation (supra) for reasons, we are constrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e position that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or Regulation under an Act after its repeal and re-enactment. In that case Section 6 did not come up for consideration. Therefore, the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in M/s Rayala Corporation case (supra). In our considered view the ratio of the said decision squarely applies to the case on hand. 35. For the reasons set forth above we do not accept the view taken in Saurashtra Cement and Chemical Industries Ltd. (supra), in Falcon Tyres Ltd. (supra) and the other decisions taking similar view. It is not correct to say that in considering 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision. 39. In the present case, as noted earlier, Section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceeding. Therefore action for realisation of the amount refunded can only be taken under the new provision in accordance with the terms thereof. 40. The further question that arises for consideration in this connection is whether the Notification No. 267/77, dated 6-8-1977 by which Rule 10 was deleted contained any provision for continuance of the proceedings already initiated and whether Act 25 of 78 which introduced Section 11A of the Central Excise Act, adopted the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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