TaxTMI 
TaxTMI 
2023 (5) TMI 803
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....ld the Order-in-Original dated 30.11.2017 passed by the Principal Commissioner Central Tax (Goods & Services), Delhi (hereafter 'the Adjudicating Authority') insofar as the computation of duty is concerned. According to the Adjudicating Authority as well as the Tribunal, the duty payable by the respondents, in the facts of the present case, for the months of July and August, 2008 was required to be computed on the basis of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (hereafter 'the PMPM Rules') as in force, prior to the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Second Amendment Rules, 2008 (hereafter 'the Second Amendment Rules') coming into force. The Adjudicating Authority as well as the Tribunal had reasoned that the premises of respondent no. 1 was searched on 04.08.2008, and the Second Amendment Rules came into force on 20.10.2008. Factual Context 7. Respondent no. 1 (M/s OM Fragrances) is a firm enagaged in the business of manufacturing and clearing of gutkha under the brand name "India Gold", for sale in the domestic market. Respondent no. 2 is one of its constituent partners. 8. Upon ....
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.... Rs.10,00,000/- on respondent no. 2 and Sh. Rajeev Gupta respectively. 13. The respondents filed an appeal against the Order-in-Original dated 23.04.2010 before the Tribunal, which was disposed of by an order dated 03.02.2017. The Tribunal remanded the matter to the Adjudicating Authority to decide the matter afresh after affording the respondents an opportunity to be heard. 14. The show cause notice was adjudicated afresh by the Adjudicating Authority by an Order-in-Original dated 30.11.2017. In terms of the said order, the Adjudicating Authority determined the central excise duty at Rs.26,29,439/- under Section 11A of the Central Excise Act, 1944 and directed recovery of the same. In addition, the Adjudicating Authority ordered confiscation of the seized finished goods valued at Rs.3,85,000/- with an option to the respondents to redeem the goods on payment of redemption fine of Rs.1,00,000/-. Additionally, the Adjudicating Authority imposed a penalty of Rs.26,29,439/- on respondent no. 1 and Rs.1,00,000/- on Sh. Rajeev Gupta. 15. The Order-in-Original dated 30.11.2017 was reviewed by the Chief Commissioner of Central Goods & Services Tax, Delhi Zone and he directed filin....
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.... valid. b. Whether the Ld. Tribunal failed to consider the actual intent of the legislation as mentioned in Rule 17(2) of PMPMR-2008." 21. Mr. Atul Tripathi, learned counsel appearing for the Revenue contended that the quantum of duty was required to be determined on the basis of Rule 17(2) of the PMPM Rules as substituted by the Second Amendment Rules. Reasons and Conclusion 22. In exercise of the powers conferred under Sub-sections (i) and (iii) of Section 3 of the Central Excise Act, 1944, the Central Government has framed the PMPM Rules, which were notified under Notification No. 30/2008 - Central Excise (N.T.) dated 01.07.2008. The PMPM Rules came into force on 01.07.2008 as expressly provided under Rule 1(ii) of the PMPM Rules. 23. Rule 17 of the PMPM Rules, as notified, is relevant. The same reads as under: "17. Penalty for contraventions, etc. (1) Subject to the provisions of section 11AC of the Act, if any manufacturer produces or removes notified goods in contravention of any provision of these rules, then all such goods shall be liable to confiscation, and the manufacturer shall be liable to a penalty not exceeding the duty leviable on the n....
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....d in the Notification dated 01.07.2008 (as amended on 20.10.2008) to the number of operating packing machines found at the factory. 27. The Tribunal rejected the said contention in the following manner: "18. It is not in dispute that the search was conducted on 04.08.2008. At that time the unamended rule 17(2), which had come into force on 01.07.2008, was operating. The amended rule 17(2) came into force on 20.10.20008 and there is nothing in the amended Rules that may show that they shall apply retrospectively w.e.f. 01.07.2008. The contention of the learned authorised representative appearing for the department that merely because the amended rule 17(2) states that such machine shall be deemed to have been in operation since 01.07.2008, it would mean that the amended rule 17(2) shall apply retrospectively from 01.07.2008 cannot be accepted. The amended rule 17(2) would apply to any search conducted after 20.08.2008 and it would only be in such a situation that the consequence would flow from 01.07.2008. At the time when the search was conducted on 04.08.2008, rule 17(2) had not been amended and the amended rule 17(2) cannot impose duty at a higher rate with retrospect....
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....portant principle applies : in the absence of express statutory authorisation, delegated legislation in the form of rules or regulations, cannot operate retrospectively. In CIT v. M.C. Ponnoose [CIT v. M.C. Ponnoose, (1969) 2 SCC 351 : (1970) 1 SCR 678] this rule was spelt out in the following terms : (SCC p. 354, para 5) "5. ... The courts will not, therefore, ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the legislature. Parliament can delegate its legislative power within the recognised limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the courts that the persons or authority exercising subordinate legislative functions cannot make a rule, reg....