Executive Order Cannot Override Statutory Rules: Court Quashes Order, Directs Compliance

The High Court held that an executive order cannot modify statutory rules and emphasized that statutory rules must be followed until formally amended. The court allowed the writ petition, quashed the impugned order, and directed the respondent to re-consider the petitioner's rebate claim based on the statutory provision, disregarding the conflicting executive order.

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Issues:
Denial of rebate on export of goods based on executive order restrictions.

Analysis:
The petitioner was denied rebate on export of goods due to restrictions imposed by an executive order, Circular No. 354/70/97-CX dated 13.11.1997. The petitioner argued that the statutory order, Notification No. 19/2004-C.E. (N.T.) dated 6.9.2004, did not contain such limitations. It was contended that an executive order could not modify a statutory provision. The respondents justified their actions by stating that the Central Government has the authority to issue binding Circulars. However, the court emphasized that an executive order cannot alter statutory rules.

The court highlighted that the Circular issued by the Central Board of Excise and Customs revised the procedure for proof of exports, which was already prescribed in the Notification dated 6.9.2004. It was reiterated that an executive order cannot override statutory rules. The court cited legal precedents to support this principle, emphasizing that executive orders should not conflict with statutory rules.

Referring to previous judgments, the court reiterated that statutory rules cannot be overridden by executive orders. It was emphasized that until rules are formally amended following the prescribed procedure, they must be adhered to. The court held that the impugned orders in the writ petition were unsustainable in light of the legal principles discussed.

Consequently, the court allowed the writ petition, quashed the impugned order dated 9.9.2011, and directed the respondent to re-consider the petitioner's claim for rebate in central excise based on the Notification dated 6.9.2004, disregarding the Circular dated 13.11.1997.

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