Omission of excise provisions barred continuation of duty and penalty proceedings; the impugned order was set aside.

Demand of duty and penalties under Rule 96ZQ and Section 3A could not survive after omission of the relevant provisions, because the challenge went to the adjudicating authority's jurisdiction to proceed. The Tribunal followed the Gujarat High Court's view on continuation or initiation of proceedings after omission of the rule and related provision, and held that the Supreme Court decision relied on by the Revenue did not decide this jurisdictional issue. The impugned order was therefore unsustainable and was set aside.

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Issues: Whether the demand of duty and penalties imposed under Rule 96ZQ of the Central Excise Rules, 1944 and Section 3A of the Central Excise Act, 1944 could survive after omission of the relevant provisions, and whether the impugned order was liable to be set aside.

Analysis: The Tribunal noted that the very same controversy had already been decided by the Gujarat High Court in a challenge to the vires of Rule 96ZQ, where the continuation or initiation of proceedings after omission of the rule and the related statutory provision was examined. The Tribunal further held that the earlier Supreme Court decision relied upon by the Revenue did not decide the present jurisdictional issue arising from omission of the provisions. Since the High Court had already concluded the matter and the challenge went to the root of the adjudicating authority's power to proceed, the impugned order could not be sustained.

Conclusion: The demand and penalties under Rule 96ZQ and Section 3A could not be sustained in the manner adopted in the impugned order, and the order was liable to be set aside.

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