Omission of charging provision without saving clause bars continued excise recovery proceedings and quashes pending demands.

Omission of a charging provision and its allied machinery rule, absent any saving clause, operates as repeal and prevents continued recovery proceedings founded solely on those provisions. Applying that principle, the Gujarat HC held that proceedings for excise duty, interest and penalty under Section 3A of the Central Excise Act and Rule 96ZQ of the Central Excise Rules could not be sustained after their omission, because no saving provision preserved the pending action. The impugned notices, recovery steps and related orders were therefore quashed as lacking jurisdiction once the statutory source of liability had ceased to operate.

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Issues: Whether proceedings for recovery of excise duty, interest and penalty could continue after omission of Section 3A of the Central Excise Act, 1944 and Rule 96ZQ of the Central Excise Rules, 1944, in the absence of a saving clause.

Analysis: The petition challenged the demand and recovery measures on the footing that the charging provision and the relevant compounded levy rule had been omitted with effect from 11.05.2001 and 01.03.2001 respectively. The governing principle applied was that omission of a statutory provision, in the absence of a saving clause, operates as repeal and does not preserve proceedings that were not concluded before the omission took effect. The earlier rejection of abatement and the later recovery steps could not be sustained once the statutory source of liability stood omitted. The Court relied on the settled position that the omission of the charging provision and the machinery rule deprives the authorities of jurisdiction to continue or enforce such proceedings thereafter.

Conclusion: The proceedings and recovery actions based on Section 3A of the Central Excise Act, 1944 and Rule 96ZQ of the Central Excise Rules, 1944 were unsustainable and were quashed.

Final Conclusion: The impugned notices and orders were set aside because the statutory provisions invoked for levy and recovery had ceased to operate and no saving provision preserved the pending action.

Ratio Decidendi: In the absence of a saving clause, omission of a charging provision and its allied machinery rule is treated as repeal, and pending or continued proceedings founded exclusively on those omitted provisions cannot be sustained.

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