Omission of fiscal provisions without a saving clause bars pending duty and penalty proceedings, including de novo adjudication.

Proceedings for duty and penalty under the compounded levy scheme could not be continued after omission of Rule 96ZQ and Section 3A without any saving clause. Although the show cause notice and initial adjudication predated the omissions, the original order had been set aside and the matter remanded for de novo quantification, so the case was not finally concluded when the provisions ceased to exist. Applying the principle that omitted fiscal provisions do not survive for pending matters absent saving language, the demand and penalty lapsed and the Commissioner (Appeals) was not required to restore the demand.

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Issues: Whether proceedings for duty and penalty under the compounded levy scheme survived after omission of Rule 96ZQ of the Central Excise Rules, 1944 and omission of Section 3A of the Central Excise Act, 1944 without any saving clause, where the matter had been remanded for de novo adjudication and was concluded only after such omission.

Analysis: The demand arose under the compounded levy scheme applicable to independent processors. Though the show cause notice and initial adjudication had taken place before the omissions, the appellate authority had set aside the original order and remanded the matter for de novo quantification. The fresh adjudication was completed only in 2004, after omission of Rule 96ZQ with effect from 1 March 2001 and omission of Section 3A with effect from 11 May 2001. Following the Gujarat High Court view, and the principles applied from the decisions on omission of fiscal provisions, the absence of a saving clause meant that proceedings not concluded by the date of omission could not survive.

Conclusion: The proceedings for duty and penalty did not survive, and the demand set aside by the Commissioner (Appeals) was not liable to be restored.

Ratio Decidendi: Where a fiscal provision and the rule made thereunder are omitted without a saving clause, proceedings pending and not finally concluded as on the date of omission lapse and cannot be continued through de novo adjudication.

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