Statutory saving provisions preserve accrued excise liabilities despite later omission of the enabling section and rules.

Liabilities and obligations incurred under Rules 96ZO and 96ZP of the Central Excise Rules, 1944, while those rules were in force, remained enforceable after their omission because Section 38A of the Central Excise Act, 1944, preserves the prior operation of amended, repealed, superseded or rescinded rules and protects accrued liabilities, penalties, proceedings and remedies. The subsequent omission of Section 3A did not extinguish obligations already incurred during the currency of the rules. The saving clause in the 2001 amendment also supported continuation of those accrued liabilities.

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Issues: Whether liabilities and obligations incurred under Rules 96ZO and 96ZP of the Central Excise Rules, 1944, before their omission were saved and enforceable notwithstanding the subsequent omission of Section 3A of the Central Excise Act, 1944.

Analysis: Section 3A created a special compounded levy mechanism dependent on rules for determination of annual capacity and collection of duty. Rules 96ZO and 96ZP imposed specific duties, liabilities, and penalties on manufacturers while they were in force. Those rules were omitted by the Central Excise (Third Amendment) Rules, 2001, which also contained an express saving clause. Section 38A of the Central Excise Act, 1944, inserted by the Finance Act, 2001, is a comprehensive saving provision that preserves the previous operation of amended, repealed, superseded, or rescinded rules and protects liabilities, penalties, proceedings, and remedies already incurred. Since the liabilities in question had arisen during the currency of the rules and before their omission, the subsequent omission of Section 3A did not extinguish them.

Conclusion: The obligations and liabilities incurred under Rules 96ZO and 96ZP before their omission remained enforceable under Section 38A of the Central Excise Act, 1944, notwithstanding the omission of Section 3A.

Ratio Decidendi: A statutory saving provision that expressly preserves liabilities incurred under amended or omitted rules continues to operate on accrued obligations, and such liabilities are not wiped out by the subsequent omission of the enabling section.

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