Omitted charging provision cannot sustain delegated levy proceedings; demand, interest and penalty under the extinct excise scheme fell through.

Omission of the parent charging provision for the compounded capacity-based excise scheme under Rule 96ZO without an express saving clause meant the subordinate rule and pending proceedings founded on it could not continue. The general saving provision in Section 6 of the General Clauses Act, 1897 was treated as inapplicable to such an omission, and Section 38A of the Central Excise Act, 1944 did not preserve demands where the charging provision itself had ceased to exist. As a result, proceedings for demand, interest and penalty under the omitted scheme were not maintainable and the impugned adjudication was liable to be set aside.

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Issues: Whether proceedings and demand raised under Rule 96ZO could survive after omission of Section 3A of the Central Excise Act, 1944 without any saving clause, and whether the impugned adjudication was liable to be set aside.

Analysis: Section 3A was the parent levy provision for the compounded capacity-based scheme under Rule 96ZO. Once the parent provision was omitted by the Finance Act, 2001 without an express saving clause, the subordinate rule and the pending proceedings founded upon it could not be continued. The general saving provision in Section 6 of the General Clauses Act, 1897 was held inapplicable to an omission in this context, and Section 38A of the Central Excise Act, 1944 did not preserve proceedings where the charging provision itself had disappeared. On that basis, the demand, interest and penalty rooted in the omitted scheme could not be sustained.

Conclusion: The issue was decided in favour of the assessee. The demand proceedings under the omitted scheme were not maintainable and the impugned order was liable to be set aside.

Ratio Decidendi: Where the parent charging provision of a delegated levy scheme is omitted without an express saving clause, the subordinate legislation and pending proceedings founded on that provision cease to survive.

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