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TMI Blog2007 (9) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of Rules 96ZO and 96ZP of the Central Excise Rules, 1944 w.e.f. 1-3-2001. According to the assessees, since there was no saving clause introduced while omitting Section 3A of the Act, the obligations and liabilities even if incurred during the currency of Rules 96ZO and 96ZP did not survive beyond 11-5-2001, being the date of the omission of Section 3A. According to the assessees, Section 6 of the General Clauses Act, 1897 cannot be invoked in these cases because it applied to 'repeal' of an enactment and not to 'omission' of a provision of the Act enacted by Parliament. 2.The Division Bench before which the matters were listed, noticing that there were conflicting views on the issues involved, has referred the following two issues for being considered by the Larger Bench :- (1) Whether, having accepted the position that the protection under Section 38A of the Central Excise Act is available to action taken by the department against them under Rules 96ZO and 96ZP beyond the date of omission of these rules, the assessees are entitled to contend that similar protection under Section 6 of the General Clauses Act is not available to departmental action tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 10A of the Central Excise Rules, 1944, which provided for recovery of duties or charges short-levied or erroneously refunded, and regarding delegated powers for recovery of sums due to the government, held that since Rule 10 or Rule 10A was neither a Central Act nor a Regulation defined in the General Clauses Act, Section 6 thereof was not applicable. It was also held that the decision in Rayala Corporation (supra) was directly on the question of applicability of Section 6 of the General Clauses Act in a case where the rule was deleted or omitted by a notification and the question was answered in the negative by holding that Section 6 only applies to repeals and not omissions, and applies when the repeal is of a Central Act or Regulation and not of a Rule. The learned counsel also relied upon the decision of the Supreme Court in General Finance Co. Anr. v. Asstt. Commissioner of Income Tax, Punjab, 2002 (7) SCC 1. While finding that the submission of the ld. counsel that 'omission' and 'repeal' had identical effect in operation of statutes had force, it was held in para-8 of the judgment that their lordships were constrained to follow the two decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . UOI Anr., 2006 (2) SCC 740, he pointed out that the provisions of Section 6 of the General Clauses Act were referred to by the Court in the context of the omission of clause (d) of Section 16 of the Employees Provident Fund and Miscellaneous Act, 1952. The Supreme Court in the context of Section 6(c) of the Act held that the effect of the amendment was that it did not affect any right, privilege, obligation or liability acquired, accrued or incurred. It was submitted that the Court did not make any distinction between 'repeal' and 'amendment' or 'omission' because the effect was the same i.e. the provision of law in question ceased to exist. The decision of the High Court of Gujarat in Torrent Laboratories Pvt. Ltd. v. UOI, 1991 (55) E.L.T. 25 (Guj.) was cited to point out that it was held therein that Rayala Corporation case related to a temporary statute and that there was a presumption that legislature would never intend evasion of a provision of the statute. Reliance was also placed on the decision of the Punjab and Haryana High Court in Shree Bhagwati Steel Rolling Mills v. CCE, Chandigarh, 2007 (207) E.L.T. 58 (P H), in which it was held that, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the process of manufacture or production, the extent of evasion of duty in regard to such goods and other relevant factors which led the Central Government to form an opinion that it was necessary to do so for safeguarding the interest of the Revenue. On such goods being notified, excise duty was to be levied and collected thereon in accordance with the other provisions of Section 3A. The important provision in this regard as reflected in sub-section (2) of Section 3A was that on the notification being issued under sub-section (1), the Government may, by rules, provide for determination of the annual capacity of production, or factor/s relevant to the ACP, by the Commissioner. The Annual Capacity of Production so determined was to be considered to be the annual production of such goods by such factory. Under sub-section (3) of Section 3A, the duty of excise on such notified goods was required to be levied at the rates notified in the gazette and to be collected in the manner, as may be prescribed under the rules. The operation of Section 3A(1) was totally dependent upon the manner and method of determination of the annual production capacity and the levy and collection provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le under the Act was amended, repealed, superseded or rescinded, then, unless a different intention appeared, such amendment, repeal, supersession or rescinding shall not, inter alia, affect the previous operation of such rule or affect any obligation or liability incurred under the rules so amended, repealed, superseded or rescinded. Penalties, forfeiture or punishment incurred in respect of any offence committed under or in violation of such rule were also not affected. It was provided that the investigation, legal proceeding or remedy in respect of such obligation, liability, penalty, forfeiture or punishment were also not affected and that such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture, punishment may be imposed as if the rule had not been amended, repealed, superseded or rescinded. 8.1There cannot be a greater all pervasive saving clause than Section 38A. When, admittedly, the obligations and liabilities were incurred under Rules 96ZO and 96ZP during their currency when Section 3A was still in force, amendments by omission, repeal etc. contemplated by Section 38A did not affect such liabilities, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abilities arising under the rules though protected by Section 38A. Section 38A, in our opinion, clearly governs the field and saves the obligations and liabilities that had already arisen while these rules were in operation so that they could be enforced and implemented as contemplated by Section 38A. It is therefore unnecessary to enter into the controversy surrounding the provisions of Section 6 of the General Clauses Act as to the meaning of the word 'repeal' on which diverse views have been expressed by the Courts. 9.For the forgoing reasons, we answer the issues referred to the Larger Bench as under : (a) The provisions of Section 38A of the Central Excise Act, 1944, inserted by Section 131 of the Finance Act, 2001, are applicable in respect of the obligations and liabilities incurred under Rules 96ZO and 96ZP before they were omitted by Rule 7 of the Central Excise (Third Amendment) Rules, 2001, notwithstanding the omission of Section 3A w.e.f. 11-5-2001 by the Finance Act, 2001. (b) This issue does not survive in view of our answer to the above issue, at (a). 10. The reference is, accordingly, answered. The appeals will now be placed before the regular be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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