Preservation of pre-repeal excise liabilities under Section 38A led the Madras HC to dismiss the writ petitions.

Omission of Section 3A of the Central Excise Act and Rules 96ZO and 96ZP did not extinguish liabilities incurred before their repeal, because Section 38A was treated as preserving obligations and liabilities arising under those provisions. The Madras HC followed the Larger Bench view of the Tribunal that Section 38A, inserted by the Finance Act, 2001, saved pre-omission liabilities under Rules 96ZO and 96ZP. It also noted that earlier relief had been refused in an identical matter where there was no challenge to the validity of the Finance (No. 2) Act, 2009. On that basis, the writ petitions were dismissed.

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Issues: Whether the omission of Section 3A of the Central Excise Act, 1944 and Rules 96ZO and 96ZP of the Central Excise Rules, 1944 affected liabilities incurred before their omission, and whether Section 38A of the Central Excise Act, 1944 saved such obligations.

Analysis: The Court noted that the Larger Bench of the Tribunal had held that Section 38A, inserted by Section 131 of the Finance Act, 2001, applied to obligations and liabilities incurred under Rules 96ZO and 96ZP before their omission. The Court also noticed that, in an earlier identical matter, relief was declined in the absence of any challenge to the validity of the Finance (No. 2) Act, 2009. Following that view, the Court found no basis to grant the relief sought in these writ petitions.

Conclusion: The challenge to the impugned order failed and the writ petitions were dismissed.

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