Omission of charging provision ends compounded levy liability; machinery rules cannot sustain recovery without a saving clause.

The omitted charging provision under the compounded levy scheme was treated as the source of liability, while Rule 96ZQ was regarded only as a machinery rule for payment and default consequences. Once Section 3A of the Central Excise Act stood deleted without any saving clause, Section 6 of the General Clauses Act did not preserve the liability or authorise recovery under the discontinued scheme. As a result, demands and pending proceedings based on the omitted provision were held unsustainable, and recovery under the associated rules could not continue.

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Issues: Whether demand and proceedings under Rule 96ZQ(ii) of the Central Excise Rules, 1944 could survive after omission of Section 3A of the Central Excise Act, 1944 without a saving clause.

Analysis: The liability under the compounded levy scheme was held to arise from Section 3A, while Rule 96ZQ was treated only as a machinery provision regulating payment and consequences of default. Once the charging provision stood deleted without any saving clause, Section 6 of the General Clauses Act did not preserve the liability or permit recovery under the omitted scheme. Proceedings initiated earlier but concluded after omission were therefore not sustainable.

Conclusion: The demand and the impugned order were unsustainable, and the assessee succeeded on the issue.

Final Conclusion: The appeal was allowed and the duty demand based on the omitted scheme was set aside.

Ratio Decidendi: Where the charging provision creating the liability is omitted without a saving clause, proceedings and recovery under the associated machinery rules cannot survive.

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