Repeal of Modvat rules can defeat ongoing adjudication and support waiver of pre-deposit and stay of recovery.

Proceedings under omitted Modvat provisions were held vulnerable where the adjudication relied on Rule 57-I after its omission and the regime had been substituted by Rules 57AA to 57AK. The analysis applied Section 6 of the General Clauses Act, 1897, noting that repeal of rules is not saved for continuing proceedings unless a validating provision exists, and also relied on a circular recognising that such proceedings cannot continue after repeal or substitution. On that basis, the appellants were found to have established a strong prima facie case, and waiver of pre-deposit with stay of recovery was granted pending appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery on the ground that the adjudication proceeded under repealed Modvat provisions and a prima facie case was made out.

Analysis: The order records that the Modvat regime earlier contained in Rules 57A to 57V had been substituted by Rules 57AA to 57AK, and that the impugned adjudication had invoked Rule 57-I after its omission. Reliance was placed on the principle that Section 6 of the General Clauses Act, 1897 does not save proceedings upon repeal of rules in the absence of a validating provision, and on a circular recognising that proceedings cannot continue after such repeal or substitution. In that backdrop, the appellants were found to have made out a strong prima facie case for interim relief.

Conclusion: The request for waiver of pre-deposit was allowed and recovery was stayed pending disposal of the appeals.

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