Omission of charging and machinery provisions barred continuation of compounded levy recovery proceedings without a saving clause.

Omission of a charging provision and the connected machinery rule for compounded levy, without any saving clause, is treated as a repeal for pending proceedings. On that basis, recovery under the omitted levy could not continue where the action had not attained finality before omission, and Section 6 of the General Clauses Act did not preserve enforcement in the manner argued. The recovery order was therefore without jurisdiction and relief followed for the assessee.

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Issues: Whether proceedings for recovery of compounded levy duty could continue after omission of Section 3A of the Central Excise Act, 1944 and Rule 96ZP of the Central Excise Rules, 1944, in the absence of any saving clause.

Analysis: The dispute concerned a demand raised under the compounded levy scheme after the charging provision and the relevant rule had been omitted. The governing principle applied was that omission of a charging provision or the machinery rule, without a saving clause, is treated as a repeal for the purpose of continuation of pending proceedings. In that situation, liability cannot be enforced under the omitted provision, and Section 6 of the General Clauses Act, 1897 does not save the proceedings in the manner contended. The Court followed the settled position that once the statutory basis for the levy ceased to exist and the action had not attained finality before omission, further proceedings could not validly continue.

Conclusion: The proceedings were not permissible after omission of the relevant provisions, and the recovery order was without jurisdiction. The relief was granted in favour of the assessee.

Ratio Decidendi: Where a charging provision and the connected machinery rule governing a levy are omitted without a saving clause, pending proceedings not finally concluded before the omission cannot be continued or enforced on the basis of the omitted law.

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