1984 (6) TMI 60 - AT - Central Excise

Tribunal Rules Valid Proceedings Continue Despite Rule Changes; Rejects 'Breathing Time' in Duty Recovery.

The Tribunal concluded that proceedings initiated under valid rules at the time can continue despite subsequent repeal or substitution of those rules. It ... Judicial Freedom - Appellate Tribunal Issues Involved:1. Continuation of proceedings initiated under repealed or substituted rules.2. Applicability of rules for short levy or non-levy before and after amendments.3. Governing provisions for refund claims before and after amendments.4. Concept of 'breathing time' in legal proceedings.Summary:Issue 1: Continuation of Proceedings Initiated Under Repealed or Substituted RulesThe Tribunal addressed whether proceedings initiated under rules 10 or 10A before their amendment on 6-8-1977, and proceedings under rule 10 before its omission on 17-11-1980, could continue after these rules were substituted or repealed. The Tribunal concluded, adopting the view of the Madhya Pradesh High Court in the Gwalior Rayon case, that such proceedings could continue. This was supported by the principle that the substitution or repeal of rules without a saving clause does not invalidate ongoing proceedings initiated under the previous rules.Issue 2: Applicability of Rules for Short Levy or Non-Levy Before and After AmendmentsThe Tribunal examined which rules should be invoked for short levy or non-levy occurring before the amendments of 6-8-1977 and 17-11-1980, but for which show cause notices were issued after these dates. It was held that the period of limitation applicable at the time of issuing the show cause notice should be applied, not the period when the short levy or non-levy occurred. The Tribunal rejected the argument that the right to collect duty is a 'vested right' of the State, which could not be curtailed by subsequent amendments.Issue 3: Governing Provisions for Refund Claims Before and After AmendmentsThe Tribunal did not specifically address the points related to refund claims as they were not directly arising from the appeals before the Special Bench B. However, it was implied that similar principles of retrospective application and continuity of proceedings would apply.Issue 4: Concept of 'Breathing Time' in Legal ProceedingsThe Tribunal rejected the concept of 'breathing time' as laid down in the Kanpur Bottling case, stating that this concept cannot be inducted in proceedings initiated by show cause notices for recovery of duty or differential duty. The Tribunal emphasized that the State cannot claim 'vested rights' or 'breathing time' in such matters.Conclusion:The Tribunal concluded that:- The President has the competence to constitute Larger Benches to resolve conflicting views of different Benches.- The Tribunal, with its all-India jurisdiction, is not bound by the views of any particular High Court but can adopt the most appropriate view.- Proceedings initiated under valid rules at the time can continue despite subsequent repeal or substitution of those rules.- The period of limitation applicable at the time of issuing the show cause notice should be applied.- The concept of 'breathing time' is not applicable in proceedings for recovery of duty or differential duty.