2013 (12) TMI 1241 - HC - Central Excise

Court affirms Tribunal orders despite Rule omission

The High Court upheld the orders of the Customs, Excise and Service Tax Appellate Tribunal and the Commissioner of Central Excise, emphasizing that the ... Abatement claim as per Rule 96ZO(3) of Central Excise Rules, 1944 due to closure of furnace – Failure to comply with the Obligations under the rule – Held that:- Omission of a Rule as opposed to a mere repeal or deletion, does not confer legitimacy on pending proceedings as they would necessarily come to an end but this principle of law does not apply to the present case – Relying upon Shree Bhagwati Steel Rolling Mills V/s Commissioner of Central Excise, Chandigarh [2006 (10) TMI 17 - HIGH COURT OF PUNJAB & HARYANA (CHANDIGARH)] - With the introduction of Section 38A in the Central Excise Act, 1944, the omission or otherwise of Rule 96ZO(3) of the Rules would not affect any obligation or liability that had already accrued or incurred – thus, the contention that omission of Rule 96ZO(3) of the Rules would render adjudication of proceedings of abatement based upon Rule 96ZO(3) of the Rules a nullity, are without merit – Decided against Appellant. Issues:Challenge to orders of Customs, Excise and Service Tax Appellate Tribunal and Commissioner of Central Excise based on omission of Rule 96ZO of the Central Excise Rules, 1944.Analysis:The appellant contested the orders dated 20.05.2009 and 09.10.2003 issued by the Customs, Excise and Service Tax Appellate Tribunal and the Commissioner of Central Excise, respectively. The appellant argued that the disallowance of abatement due to the omission of Rule 96ZO of the Rules was unlawful. They claimed that the rule's omission meant it could not be applied to ongoing proceedings. The appellant relied on various judgments to support their stance. However, the revenue's counsel countered by citing a previous Division Bench judgment that held proceedings initiated before the omission of a relevant section were not invalidated. The High Court, after considering the arguments, declined to provide relief to the appellant.The appellant, a manufacturer of non-alloy steel ingots/billets, had opted for lump-sum duty payment under Rule 96ZO(3) of the Rules. An abatement claim was filed by the appellant, which was rejected for non-compliance with the rule's obligations. The appeal to the CESTAT was also dismissed. The appellant later tried to challenge the impugned orders, focusing on the omission of Rule 96ZO(3) and its implications. However, the court found no grounds to entertain this plea, as the findings were based on factual defaults by the appellant.The main contention of the appellant revolved around the omission of Rule 96ZO(3) in 2001 and its impact on ongoing proceedings. The court examined the precedents cited by the appellant and noted that the omission of a rule did not automatically invalidate pending proceedings. Referring to a similar case, the court highlighted Section 38A of the Finance Act, 2001, which clarified the effects of amendments, repeals, or omissions of rules. The court concluded that the omission of Rule 96ZO(3) did not nullify obligations or liabilities that had already arisen. Therefore, the court dismissed the appeal, finding no merit in the appellant's arguments.In conclusion, the High Court upheld the impugned orders, emphasizing that the omission of Rule 96ZO(3) did not impact the validity of ongoing proceedings or the obligations incurred by the appellant. The court relied on legal provisions and previous judgments to support its decision, ultimately dismissing the appeal without costs.