Omitted fiscal rule cannot sustain pending liability proceedings absent a saving clause; demand was set aside.

Liability under the Compounded Levy Scheme could not be finally confirmed after Rule 96ZP of the Central Excise Rules, 1944 was omitted, because no saving clause preserved pending proceedings. The Tribunal applied the settled principle that once the enabling fiscal rule ceases to exist, adjudication based on that rule cannot be concluded thereafter unless the law expressly saves the action. On that basis, the demand and the orders confirming it were unsustainable and were set aside in favour of the assessee.

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Issues: Whether the demand and adjudication under Rule 96ZP of the Central Excise Rules, 1944 could survive when the rule stood omitted before the adjudication order was passed.

Analysis: The appellant had been subjected to the Compounded Levy Scheme under Rule 96ZP, but the adjudication order confirming liability was passed after the omission of Rule 96ZP. The Tribunal applied the settled principle that once the enabling rule stood omitted, and in the absence of a saving clause preserving pending proceedings, no liability could be finally determined thereafter. The Tribunal followed the binding judicial view that proceedings initiated under the omitted rule could not be concluded after the date of omission.

Conclusion: The impugned demand and the orders confirming it could not be sustained and were liable to be set aside in favour of the assessee.

Ratio Decidendi: Proceedings for liability under an omitted fiscal rule cannot be concluded after its omission unless the statute expressly saves such pending action.

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