Omission of Rule 96-ZO bars interest and penalty, while underlying duty consequences may still survive.

After omission of Rule 96-ZO of the Central Excise Rules, 1944, interest and penalty imposed solely under that rule could not be sustained for the disputed period. The Tribunal applied the Supreme Court's view that, although the underlying duty liability under the compounded levy scheme could survive, ancillary interest and penalty did not continue unless expressly preserved by law. On that basis, the interest and penalty demand was deleted, while the remaining duty-related consequences were left undisturbed in accordance with law.

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Issues: Whether, after the omission of Rule 96-ZO of the Central Excise Rules, 1944, the levy of interest and penalty could still be sustained for the disputed period.

Analysis: The appeal was confined to the liability to interest and penalty. The dispute arose under the compounded levy regime applicable to ingots and billets under Section 3A of the Central Excise Act, 1944 read with the relevant exemption notifications. The Tribunal applied the Supreme Court ruling that, although the substantive duty liability under the omitted rule could survive, the ancillary levy of interest and penalty could not be enforced after omission of the rule.

Conclusion: The levy of interest and penalty was not sustainable and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of deleting interest and penalty, while the remaining duty-related consequences were left undisturbed in accordance with law.

Ratio Decidendi: Where the enabling rule is omitted, interest and penalty imposed solely under that rule cannot be enforced unless expressly preserved by law.

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