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TMI Blog2015 (10) TMI 2671X X X X Extracts X X X X X X X X Extracts X X X X ..... in the eventuality of an omission. It was explained that omission and repeal are different things and omission does not amount to repeal. The Court also referred the dictionary meaning of 'rescind' and 'amend' and observed that the same are not synonymous with the word 'omit'. It was thus held that Section 38A of the Act would not save any obligation, liability etc. acquired, accrued or incurred under any rule, order or notification which has been omitted. Similar fact situation is prevalent in the present case and therefore on omission of the rule in absence of savings, the proceedings under Section 138A of the Act in question would not be saved. Similar is the fact situation in the present case. As indicated earlier, the relevant notification in this case also does not make any provision akin to Section 6 of the General Clauses Act. It also does not make any provision continuing the liabilities incurred under Rule 56A. Immediately on omission of Rule56A during the pendency of the complaint, it is deemed to have disappeared from the statute book and therefore it can no more be relied upon. Consequently, no prosecution initiated during the subsistence of Rule 56A can cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A without a saving clause, initiation and subsistence of the prosecution for violation of Rule 56 A subsequent to such omission was not sustainable in law. 2.1 Admissibility of the confessional statements and/or other statements also fall for consideration in this revision application. 3. Brief facts giving rise to the case against the petitioner are that a complaint came to be lodged by the competent Officer under the Act alleging the offences under Section 9 of the Act r/w Section 173Q of the Rules for violation of Rules 52 A, 56 A, 173 G and 9(2) r/w Section 11A of the Act r/w Section 120 B of the Indian Penal Code in the Court of learned Metropolitan Magistrate against 09 persons amongst whom accused No.1 was the petitioner company and other 08 were its employees. The employees have been discharged by the trial Court and thus the case remained only against the petitioner company. 3.1 Under Rule 56A, a notification came to be issued delegating certain powers to the Collector of Central Excise in the situation emerging in such notification. Notification referred to certain specified goods/material components in the schedule, which may be required by the manufacturer for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be mentioned that earlier by an order dated 20/03/2013, the application for discharge came to be rejected and this Court by an order dated 04/12/2013 passed in CR.RA No.338 of 2013 did not sustain the said order as it was bereft of reasons and the learned Metropolitan Magistrate was directed to decide the discharge application afresh after considering all the contentions. In such circumstances, the impugned order is passed. 8. Having regard to the rival contentions, this Court is required to consider the effect of omission of Rule 56A on pending a complaint before the trial Court. In other words, the question that has been raised is whether the prosecution can subsist after omission of Rule 56A without a saving clause? The Court is also required to consider as to whether Sections and 3 and 38A of the Act or Section 6 of the General Clauses Act would be able to save the situation. 8.1 It is also required to be considered whether Krishna Processors Vs. Union of India [2012 (280) E.L.T. 186 (Guj.)] is distinguishable on the ground that it was concerned with a different situation i.e. adjudication proceedings as emerging from Section 3A of the Act i.e. it was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has indicated the scope of relevant part of Rule 56A. However, for ready reference, it can be quoted thus: Rule 56A. Special procedure for movement of duty paid materials or component parts for use in manufacture of finished excisable goods. (1) Notwithstanding anything contained in these rules, the Central Government may, by notification in the Official Gazette, specify the [finished excisable goods, falling under heading No. or sub heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and the material or component parts falling under the heading No. or sub heading No. of the Schedule required for the manufacture or move convenient distribution of such goods] in respect of which the procedure laid down in subrule (2) shall apply. (2) The Collector may, on application made in this behalf and subject to the conditions mentioned in sub rule (3) and such other conditions as may, from time to time, be prescribed by the Central Government, permit a manufacturer of any excisable goods specified under sub rule (1) to receive material or component parts or finished products (like Asbestos Cement), on which the duty of excise or the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the duty of excise leviable thereon or chargeable to nil rate of duty or is not notified under sub rule (1):] 1[Provided also that no credit of duty shall be allowed in respect of any material or component parts produced or manufactured, - (i)in a free trade zone and used in the manufacture of finished excisable goods in any other place in India; or (ii) by a hundred per cent export oriented undertaking and used in the manufacture of finished excisable goods in any place in India, if such material or component parts fall under Item No.68 of the First Schedule to the Act : Provided also that credit of duty shall be restricted in respect of any material or component parts produced or manufactured, (i) in a free trade zone and used in the manufacture of finished excisable goods in any other place in India; or (ii) by a hundred per cent export oriented undertaking and used in the manufacture of finished excisable goods in any place in India, to the extent of duty which is equal to the additional duty leviable on the like goods under section 3 of the Customs Tariff Act, 1975 (51 of 1975), and is paid on such material or component parts, if such material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 . (51 of 1975) Explanation 1. Where in respect of any such like goods, any duty of customs leviable under the said section 12 is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable under the said section 12 at the highest of those rates. 6 Explanation 2. In this proviso, (i) free trade zone means the Kandla Free Trade Zone and the Santa Cruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette, specify in this behalf; (ii) hundred per cent. export oriented undertaking means an undertaking which has been approved as a hundred per cent. export oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its main purport is to allow a credit, with the permission of the Central Excise Collector, on the use of duty paid goods as indicated in Rule 56A. 15. Rule 56A does not deal with the levy of the duty and consequence of its avoidance. Availing of the credit of duty in excess of limits permissible under Rule 56A is not the same as avoidance of duty, though ultimate result may be the undue benefit to the manufacturer. It is therefore misconceived for the respondent No.1 to argue that it can fall back on Section 3 in absence of Rule 56A. Both the provisions operate in different field. Rule 56A is complete code in itself as it operates only on the notification issued by the Government making available certain rights in the nature of credit to the manufacturer. The right is thus independent of the liability under Section 3 of the Act. Section 3 applies when the incidence of the excise duty occurs i.e. production/manufacturer of the excisable goods. It is true that in absence of notification under Rule 56 A, respondent No.1 may be able to levy the excise duty when the incidence of production or manufacturing of the goods occur by reusing the excisable goods or by their use as the raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Rules, 1962, Rule 132A (relating to prohibition of dealings in foreign exchange) shall be omitted except as respects things done or omitted to be done under that rule . (emphasis supplied) 19. The act of contravention was held not to be thing done or omitted to be done under that rule . It was held that on omission of the rule, new proceedings for contravention of the rule during its subsistence were not sustainable. Having regard to the tenor of the amending rule, it was held that action already instituted may be saved, but initiation of fresh proceedings for contravention of the rule when it subsisted was not permissible. 20. Pertinently, as can be noticed from the above discussion, upon omission of the rule, things done or omitted to be done were saved by amending rule, whereas in the instant case, the things done or omitted are not saved. Therefore, the observations in M/s. Rayala Corporation (P) Ltd., Anr., (supra) as to the savings of the things already done or omitted to be done would not apply in the facts of the present case. Only distinction between the case on hand and M/s. Rayala Corporation (P) Ltd., Anr., (supra) is that while in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm the 28th day of February, 2944, namely: 38A. Effect of amendments, etc., of rules, notifications or orders. Where any rule, notification or order made or issued under this Act or any notification or order issued under such rule, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not (a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect; or (b) affect the previous operation of any rule, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed under or in violation of any rule, notification or order so amended, repealed, superseded or rescinded; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence which would not have been punishable, if that Section had not come into force. 23. The material relevant aspects emerging from Sections 131 and 132 of the Finance Act, 2001 are that the savings was to be effective only in the eventuality of amendment, repealed, supersession or rescission of rule, notification or order made under the Act or rules and not in the eventuality of omission of the provision of the Rules. It also emerges that the act or omission on the part of a person would not be punishable by virtue of such saving, if in absence of such savings i.e. Section 38A it would not be punishable. 24. If one looks at Section 6 of the General Clauses Act, it saves the situation enumerated in its clause (a), (b), (c), (d) and (e) in the event of the repeal of any enactment by the said Act or any Central Act or Regulations, in absence of contrary intention. The repeal, under the circumstances indicated in the opening part of the Section also saves investigation, legal proceedings or remedy. Such investigation, legal proceedings or remedy are permitted to be instituted, continued or enforced and such penalty, forfeiture or punishment imposable under the repealed law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the points raised in paragraph No.15 are relevant in the context of omission of Rule 56A for resolution of the dispute in this revision application. The Court noticed certain rights, liabilities, obligations and penal consequence in the eventualities contemplated in Rule 96ZQ which came to be omitted and Section 3A of the Act was also omitted later as noticed herein above. In that context, initiation and continuation of the proceedings, though in the nature of adjudicatory proceedings, fell for the consideration of the Court. Twin contentions were raised for sustaining the initiation and continuation of the proceedings being (01) the notification dated 01/03/2001 contained a saving clause except as respects things done or omitted to be done before such amendment and, (02) even in absence of such saving, Section 38 A will govern the field with effect from 28/02/1944. Initiation and continuation of the proceedings was also sought to be sustained on the ground that the regular provisions of the Act continued to apply. After taking note of Section 38 A, the Court referred to M/s. Rayala Corporation (P) Ltd., Anr., (supra) . The Court took note of the argument made before the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omission of rule 132 A of the Defence of India rules for two obvious reasons: (i) section 6 applies only to repeals and not to omissions and (ii) section 6 applies when the repeal is of a Central Act or Regulation and not of a rule. In the facts of the present case, section 6 of the General Clauses Act would not be applicable to rule 96ZQ of the Rules as the said section applies only in case of repeal of a Central Act and Regulation and not of a rule..... 29. After referring to Kolhapur Canesugar Works Ltd. vs. Union of India (supra) , the Court noticed the law that to save the situation like present one, a specific provision must exist in the statute rules, notifications, etc. Following pertinent observations were made in paragraph No.16.4: .....In the absence of any such provision in the statute or in the rule, the pending proceedings would lapse on the rule under which the notice was issued or proceedings were initiated being deleted/omitted. The court held that the position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the facts of the present case. 32. As is evident from the notification inserting Section 38 A, a very crucial explanation in the form of declaration to remove the doubt came to be introduced by Section 132 of the Finance Act, 2001. It reads thus: 132. Validation of certain action taken. (a) xxx (b) xxx (c) xxx Explanation. For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force. 33. As held above and as noticed from the plethora of decisions that repeal, rescission, etc., would entail into consequences as if the law never existed on the statute book. Therefore, immediately on omission of Rule 56A during the pendency of the complaint, it is deemed to have disappeared from the statute book and therefore it can no more be relied upon. Consequently, no prosecution initiated during the subsistence of Rule 56 A can continue after its omission and therefore penal consequences flowing therefrom would cease. It therefore can be said that the act or omission on the part of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for discharge, the Court is not obliged to appreciate the evidence, but certainly it is required to see the evidence with an object to find out as to whether the material justifies framing the charge and whether the charge, if framed on the basis of existing material, would be ground less or not? The endavour of the Court would be to examine the material available and find out whether the material is good for trial. The charge would be certainly ground less if it is framed in ignorance of settled proposition of law on a given subject. As for example, in the present case, the settled proposition of law is that on omission of a provision of law without saving, the pending proceedings would lapse. Framing a charge with intention to try the accused in such a situation would result into waste of judicial time. Therefore, there was no reason with the trial Court to postpone the appreciation of the legal position beyond trial. The finding that since from the inception of the complaint, Rule 56 A was subsisting, the proceedings can continue also depicts a misconception of law as discussed in greater detailed herein above. 39. In above view of the matter, this Court has reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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