AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 214
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....tly, Section 3A of the Central Excise Act, 1944 was omitted w.e.f. 11.05.2001 and Rule 96ZQ of the Central Excise Rules, 1944 was omitted w.e.f. 01.03.2001 without any saving clause. 1.1 The Appellants were issued various show cause notices wherein, demand of differential central excise duty under Compound Levy Scheme was proposed to be demanded along with interest and penalty. The said show cause notices were adjudicated by the adjudicating authority who vide Orders-in-Original dt.30.09.2016 and dt. 12.01.2017 confirmed the demand of central excise duty and dropped the whole demand of interest and penalty. 1.2 The Appellants being aggrieved with the above Orders-in-Original dt.30.09.2016 and dt. 12.01.2017 filed appeals before the Commissioner (Appeals) who vide Orders-in-Appeal dt.28.03.2018 and dt. 30.07.2018 upheld the orders passed by the Adjudicating Authority and rejected the appeals. Hence the present appeals. 2. Shri Ankur Upadhyay, Learned Counsel appearing on behalf of the appellant has submitted in his submission as under:- that the demand of Central Excise Duty as per Compounded Levy Scheme is levied under section 3A of the Central Excise Act, 1944 which ha....
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.... passed by the adjudicating authority holding that the appellants are liable to pay duty as per the compound levy scheme is correct or otherwise. We find that there is no dispute that though the some of the show cause notices were issued prior to omission of Section 3A of the Central Excise Act, 1944 and the provision of Rules, 96 ZO, ZP and ZQ of the Central Excise Rules, 1944 but when the orders in original were passed, the Section 3A of the Central Excise Act, 1944 and the provision of Rules, 96 ZO, ZP and ZQ of the Central Excise Rules, 1944 were not in existence as the same were omitted, while omitting this provision no saving clause was made to make this provision operative for the purpose of pending proceedings. In this position in absence of the aforesaid provision and any saving clause the adjudicating authority had no statutory power to decide any matter related to compounded levy scheme in terms of Section 3A of Central Excise Act, 1944 and under the provision of Rules, 96ZO, ZP and ZQ of Central Excise Rules, 1944 for the reason that it is not only the issuance of show cause notices but entire proceedings such as adjudication of such show cause notices has to be governe....
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....mane to refer to the provisions of Rule 96ZQ of the Rules. Rule 96ZQ makes provision for the procedure to be followed by the independent processor of textile fabrics. Sub-rule (1) thereof requires an independent processor of textile fabrics to debit the amount specified thereunder on the annual capacity of production as determined under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. Sub-rule (2) thereof provides for debiting the duty payable under sub-rule (1) in the current account maintained by the independent processor under sub-rule (1) of Rule 173G of the Rules. Sub-rule (3) says that 50% of the amount of duty payable for a calendar month under sub-rule (1) shall be paid by the 15th of the month and the remaining amount shall be paid by the end of that month. Sub-rule (4) makes provision for maintaining records etc. Sub-rule (5) which makes provision for payment of interest and penalty is in two parts. The first part provides for payment of interest at the rate of 24% per annum for the outstanding period on the outstanding amount if an independent processor fails to pay the amount of duty or any part thereof by the date specified ....
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....ny rule, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed under or in violation of any rule, notification or order so amended, repealed, superseded or rescinded; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid. and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded. 16.2 At this juncture it may be germane to refer to the decision of the Supreme Court in the case of M/s. Rayala Corporation Pvt. Ltd. v. ....
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....wn that the operation of that Act itself was not to be affected by the expiry as respects things previously done or omitted to be done. It was observed that in the said case the prosecution had been started before the Defence of India Act ceased to be in force and, secondly the language introduced in the amended sub-section (4) of Section 1 of the Act had the effect of making applicable the principles laid down in Section 6 of the General Clauses Act, so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force. The court noted that the notification of the Ministry of Home Affairs omitting Rule 132-A of the Defence of India Rules did not make any such provision similar to that contained in Section 6 of the General Clauses Act. The court observed that consequently, it is clear that, after the omission of Rule 132-A of the Defence of India Rules, no prosecution could be instituted even in respect of an act which was an offence when the rule was in force. The court further observed that when Section 4(1) of the Act was amended, the Legislature did not make any provision that an offenc....
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....ovided there is some other saving clause expressly provided in the Act or in the Rules. 16.4 In Kolhapur Canesugar Works Ltd. v. Union of India (supra) the question that arose for determination before the Supreme Court was whether after omission of old Rules 10 and 10A of the Central Excise Rules, 1944 and its substitution by the new Rule 10 by the Notification No. 267/77 dated 6th August, 1977 the proceedings initiated by the notice dated 27th April, 1977 could be continued in law. The court was of the considered view that in such a case the court is to look to the provisions in the rule which has been introduced after the omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings will continue and be disposed of under the old rule, as if the rule has not been deleted or omitted, then such proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari materia provision in the statute under which the rule has been framed, in that case also, the pending proceedings will not be affected by omission of the rule. In the absence of any such ....
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....nd 96ZO of the Rules would survive? 17.1 Dealing with the second question, Section 3A of the Act enables the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. This clause came to be inserted in the Act by the Finance Act, 1997. The reason behind introducing this provision appears to be that in certain sectors like induction furnaces, steel re-rolling mills, etc. evasion of excise duty on goods is substantial and the production is not disclosed accurately and collection of excise on their production capacity is thought of as appropriate. Under the scheme evolved in this provision the annual production capacity of mills and furnaces is determined by the Commissioner of Central Excise in terms of the rules to be framed under Section 3A(2) of the Act by the Central Government. Thereafter, the assessee would be liable to pay duty based on such determination. 17.2 Rule 96ZQ of the Rules which provides for procedure to be followed by independent processors of textile fabrics, comes into play after the Commissioner of Central Excise determines the annual capacity of production on processed textile fabrics under S....
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....ing Section 6 of the General Clauses Act as saving the right to initiate proceedings for liabilities incurred during the currency of the Act will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in the said decisions. 17.3 Thus, even in General Finance Company Ltd. (supra), the Supreme Court has not taken a different view and has followed the aforesaid two decisions. Section 6 of the General Clauses Act, therefore, has no application in the present case. The decision of the Supreme Court in General Finance Company Ltd. (supra), therefore, does not carry the case of the Revenue any further. 17.4 Thus, any obligation or liability etc. acquired, accrued or incurred under Section 3A of the Act would not be saved by Section 6 of the General Clauses Act. The next question that arises for consideration is as to whether after the omission of Section 3A of the Act with effect from 11th May, 2001 proceedings initiated under Rules 96ZQ, 96ZP and 96ZO of the Rules would survive, or in other words what would be the position of obligations or liabilities incurred under Rules 96ZQ, 96ZP and 96ZO of the Rules after th....
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....omission of Section 3A of the Act. In this regard, it may be noted that Section 38A came to be inserted in the Central Excise Act, 1944 vide Section 131 of the Finance Act, 2001 whereas Section 3A came to be omitted vide Section 121 of the said Act. Section 38A of the Act, inter alia protects any right, privilege, obligation, liability acquired, accrued or incurred; or any investigation, legal proceeding or remedy as if the rule, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded. Section 38 does not speak of giving protection to any right, privilege, obligation, liability acquired, accrued or incurred under any rule, notification or order; or any investigation, legal proceeding or remedy etc., in case the rule has been omitted. Thus, Section 38A would not protect any right, privilege, obligation or liability acquired, accrued or incurred, or any investigation, legal proceeding, remedy in respect of such right, privilege, obligation, liability etc. under Section 3A for two reasons, viz., (a) Section 38A only protects any right, liability etc., acquired, accrued or incurred under any rule, notification or order and not under any sectio....
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....ions covered under Section 131 of the Finance Act, 2001, that is, Section 38A of the Act as if the same had been in force at all material times. In the present case, apart from the fact that Section 38 of the Act, does not save the provisions which have been omitted, even if it is assumed that omissions are covered thereunder, the same would be applicable only for the period prior to 11th May, 2001, till Section 3A came to be omitted. Section 38A saves actions taken or rights and liabilities accrued under any rule, notification or order made or issued under the Act. The same does not save any action taken or rights and liabilities accrued under any provision of the Act. Thus, Section 3A stands unconditionally omitted from the statute book without any saving clause in favour of pending proceedings. All actions thereunder must, therefore, stop at the stage where they were when the provision came to be omitted, and if the proceedings had not been concluded before the omission came into effect, the same cannot be concluded thereafter. 19.1 In the facts of the present case, as noticed earlier, in Special Civil Application No. 1984 of 2002, the show-cause notice itself has been ....
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....mount of duty of Rs. 2.0 lakhs per chamber per month, Rs. 2.5 lakhs per chamber per month, Rs. 3.0 lakhs per chamber per month or Rs. 3.5 lakhs per chamber per month, as the case may be, on the annual capacity of production as determined under the Hot-air Stenter Independent Textile Processors Annual Capacity Determination Rules, 2000. (2) The amount of duty payable under sub-rule (1) shall be debited by the independent processor in the account current maintained by him sub-rule (1) of Rule 173G of the Central Excise Rules, 1944. (3) Fifty per cent of the amount of duty payable for a calendar month under sub-rule (1) shall be paid by the 15th of the month and the remaining amount shall be paid by the end of that month. (4) The independent processor shall continue to maintain records, and file returns, pertaining to production, clearance, manufacturing, storage, delivery or disposal of goods, including the materials received for or consumed in, the manufacture of excisable goods or other goods, the goods and materials in stock with him and the duty paid by him, as prescribed under the Central Excise Rules, 1944 and the notifications issued thereunder. ....
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....nt of duty outstanding from them at the end of the month. 20.3 Thus, clause (ii) of sub-rule (5) of Rule 96ZQ imposes penalty equal to the amount of duty outstanding only in respect of the amount which is outstanding at the end of the month. Though there may be delay of fifteen days in the payment of the first instalment all that is leviable under the rule is interest at the rate of twenty four per cent. However, even if there is even one day's delay in paying the amount after the end of the month, the assessee becomes liable to pay penalty equal to the amount of duty outstanding from him. 20.4 Thus, in case an independent processor fails to pay the amount of duty outstanding from him at the end of any month, he is ipso facto liable to penalty equal to an amount of duty outstanding or Rs. 5,000/-, whichever is greater. The delay in payment may be of one day or a hundred days. Notwithstanding the extent of delay, the assessee would be liable to pay an equal amount of duty outstanding from him at the end of the month. Thus, the rule does not leave any discretion to the adjudicating authority as regards imposition or non-imposition of penalty as also regarding the am....
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....s in the nature of a tax and that Article 265 imposes a limitation on the taxing power of the State insofar as it provides that the State shall not levy or collect a tax except by authority of law, that is to say, a tax cannot be levied or collected by a mere executive fiat. It must be done by an authority of law, which must mean valid law. In the case of Collector of Central Excise, Ahmedabad v. Orient Fabrics (P) Ltd. (supra), the Supreme Court has affirmed the view taken by the Delhi High Court that penalty is additional tax and as such, the constitutional mandate requires a clear authority for imposition thereof. The levy of penalty which is an additional tax has to be under authority of law which should be clear, specific and explicit. Adverting to the facts of the present case, Rule 96ZQ has been framed under Section 37 of the Act. Section 37 of the Act does not expressly authorise the Central Government to levy penalty which is an additional tax, greater than five thousand rupees. Sub-section (3) of Section 37 of the Act makes it explicit that in case no other penalty is provided under the Act, the Central Government may provide that any person committing a breach of any rul....
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.... all persons holding that kind and extent of property. If the taxation, generally speaking, imposes a similar burden on everyone with reference to that particular kind and extent of property, on the same basis of taxation, the law shall not be open to attack on the ground of inequality, even though the result of the taxation may be that the total burden on different persons may be unequal. Hence, if the legislature has classified persons or properties into different categories, which are subjected to different rates of taxation with reference to income or property, such a classification would not be open to the attack of inequality on the ground that the total burden resulting from such a classification is unequal. Similarly, different kinds of property may be subjected to different rates of taxation, but so long as there is a rational basis for the classification, Article 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality, the law may be struck down as creating an inequality amongst holders of th....
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....rge number of other persons similarly situated in relation to the penalties sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation provided such classification is not arbitrary in the sense above mentioned." 20.9 The validity of Rule 96ZQ(5)(ii) of the Rules may be examined in the light of the aforesaid legal position. As noted hereinabove, Rule 96ZQ(5)(ii) is mandatory in nature and even in case of a delay of one day, penalty equal to the amount of outstanding duty would be leviable. The rule does not require consideration as regards the period of delay or the gravity of default on the part of the concerned assessee and proposes to treat all assessees equally. An assessee paying the second instalment after one day of the specified date and an assessee paying such amount after a hundred days of the specified date are treated equally, despite the fact that in the later case, the same would show deliberate default on the part of the concerned assessee. Thus, it is apparent that the rule treats unequals as equals, thereby violating Article 14 of the Constitution. 20.10 Another aspect of the m....
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....espite the fact that Section 11AC operates where there is fraud, collusion or wilful mis-statement or suppression of facts or contravention with the intention of evading payment of duty, the proviso thereto provides for payment of only 25 per cent of the penalty in case where the amount is paid within 30 days from the date of communication of the order of the Central Excise officer determining such duty. Thus, even in serious cases of fraud and collusion, wilful mis-statement, etc., the parent Act provides for levy of only 25 per cent of the penalty where the amount is paid within a period of 30 days. Whereas under Rule 96ZQ(5)(ii), merely by dint of the fact that the amount has been paid after a delay may be of even only one day, the assessee is liable to pay penalty equal to the amount of outstanding duty. There is no discretion vested in the adjudicating authority to reduce the amount of penalty. Thus, the provisions under Rule 96ZQ(5)(ii) of the Rules evidently are more onerous than the provisions of Section 11AC of the Act which make provision for levy of penalty in case of fraud, collusion, mis-statement etc. Thus, it is apparent that the rule operates to the prejudice of the....
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....ven for slightest bona fide delay without any element of discretion is beyond the purpose of legislation. The object of the rule is to safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, an assessee can be punished or a penalty could be imposed is not a blanket power without providing for any justification. The court, accordingly, held the provisions of Rules 96ZO, ZP and ZQ permitting penalty for delay in payment, without any discretion and without having regard to the extent and circumstances for delay to be ultra vires the Act and the Constitution. 21. The next question that arises for consideration is as to whether the decision of the Supreme Court in the case of Union of India v. Supreme Steels (supra) concludes the issue involved in the present case. A perusal of the aforesaid decision of the Supreme Court indicates that in the said batch of cases, vires of Rule 96ZO of the Central Excise Rules had been challenged on the ground that it is inconsistent with the provisions of the Act. Before the Supreme Court, the counsel for the parties had informed that the matter remained confined to a p....
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....e appellate authority, they cannot be permitted to challenge the show-cause notice at a belated stage. It was contended that the petitioners after participating in the adjudication proceedings and challenging the same on merits, are not entitled to challenge the show-cause notice on the ground that the same involves a pure question of law. It was submitted that the petitioners are estopped from raising such issue as the petitioners have not only given it up but have also not deliberately canvassed the same. It was further pointed out that the petitioners in the petitions have placed reliance upon the decision of the Supreme Court in Union of India v. Supreme Steels (supra) and have acquiesced with the fact that the concerned authorities could decide the matters which are pending before them. It was submitted that in the circumstances, it is not permissible for the petitioners to now raise the contention regarding lack of jurisdiction on the part of the adjudicating authority once having taken shelter of the said decision of the Supreme Court. 21.2 In this regard, a perusal of the averments made in the petition indicates that the petitioners have sought to raise a new plea ....
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....State of Assam, AIR 1957 SC 227, particularly when the plea sought to be raised for the first time in a writ proceeding requires investigation of facts. But if the plea though not specifically raised before the subordinate Tribunals or the administrative and quasi-judicial bodies, is raised before the High Court in the writ proceeding for the first time and the plea goes to the root of the question and is based on admitted and uncontroverted facts and does not require any further investigation into a question of fact, the High Court is not only justified in entertaining the plea but in the anxiety to do justice which is the paramount consideration of the court, it is only desirable that a litigant should not be shut out from raising such plea which goes to the root of the lis involved. 21.3 In the light of the principles enunciated in the above referred decisions of the Supreme Court, it is apparent that the plea sought to be raised by the petitioners is a jurisdictional issue and goes to the root of the case. In the circumstances, this court is of the view that it is permissible for the petitioners to challenge the validity of the impugned orders on the ground of lack of ....
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....oday. In the facts and circumstances of the case, the request is declined." • The Similar case has been considered by the Hon'ble High Court of Gujarat in the case of Gopal Iron & Steel Company (Gujarat) Ltd. (supra) wherein the Hon'ble Court has passed following order:- "23. Having heard learned advocates for the respective parties and considering the material placed on record as well as, as per the decision of this Court in case of Krishna Processors (Supra) which is upheld by the Hon'ble Apex Court in case of Shree Bhagwati Steel Rolling Mills (Supra), it would be germane to refer to the controversy in nutshell arising in these appeals. Sofar as the issue of merits are concerned, we refrain ourselves from addressing to such issues of determination of APC as the only issue which is required to be considered is, whether the respondent authorities would have continued with the proceedings under Rule 96ZP read with Section 3A of the Act after the omission of both the rules and the provisions in the Year 2001 or not. In the facts of the case, admittedly the show-cause notices were issued prior to the year 2001 however, the proceedings continued before this Court....
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....ct is saved by section 6 of the General Clauses Act and whether after the omission of section 3A of the Act with effect from 11th May, 2001 proceedings initiated under the rules 96ZQ, 96ZP and 96ZO of the Rules would survive? (iii) Whether section 38A of the Act saves all obligations and liabilities incurred under rule 96ZQ of the Rules? If yes, whether the said position would prevail even after the omission of section 3A of the Act? (iv) Whether in view of section 132 of the Finance Act, 2001 everything done under the old provision is saved? (v) Whether rule 96ZQ(5)(ii) of the Rules which does not provide for any inbuilt discretion in respect of the penalty to be imposed thereunder is ultra vires the provisions of the Constitution and the Act? And (vi) Whether the decision of the Supreme Court in the case of Union of India vs. Supreme Steels and General Mills Ltd. (supra) concludes the controversy involved in the present case?" 25. So far as issue raised in this petition is concerned, we are concerned with the issue no.2, as to whether the obligation or liability incurred under Section 3A of the Act is saved by the General Clauses Act a....
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....s incurred under the omitted provisions would be saved. A Constitution Bench of the Supreme Court in the case of M/s. Rayala Corporation (supra) held that section 6 of the General Clauses Act would not apply to the omission of a provision in an Act but only to repeal, omission being different from repeal. The aforesaid view has been reiterated by another Constitution Bench of the Supreme Court in the case of Kolhapur Canesugar Works Ltd. vs. Union of India (supra) wherein the court agreed that the earlier view taken in M/s. Rayala Corporation (supra) that section 6 of the General Clauses Act only applies to repeals and not to omission and applies when the repeal is of a Central Act or regulation and not of the rule. Insofar as section 3A of the Act is concerned, the second part would not be applicable since the present case relates to omission of a section. However, the first part namely that section 6 of the General Clauses Act only applies to repeals and not to omissions would be squarely applicable to the facts of the present case. Reliance placed by the Revenue on the decision of the Supreme Court in the case of General Finance Company (supra) is misconceived inasmuch as in the....
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.... Action, if any, can be taken only under the regular provisions of the Act." 26. Ultimately, in conclusion, it was held as under: "22. For the foregoing reasons, the petitions succeed and are accordingly allowed. Rule 96ZQ (5) (ii) of the Central Excise Rules, 1944 is held to be ultra vires Articles 14, 19(1)(g) and 265 of the Constitution of India. It is further held that after the omission of rules 96ZQ, 96ZP and 96ZO of the Rules with effect from 1st March, 2001 no proceedings could have been initiated thereunder and after the omission of section 3A of the Act with effect from 11th May, 2001, without any saving clause, no pending proceeding under the said rules which had not been concluded before the omission came into effect, could be concluded thereafter. The proceedings culminating into the impugned orders having been initiated/concluded after the omission of rules 96ZQ, 96ZP and 96ZO of the Rules and section 3A of the Act are, therefore, without any authority of law and as such, cannot be sustained. The impugned orders dated 9th November, 2001/1^st January, 2002 (Special Civil Application No.1984 of 2002). dated 31^st December, 2003 (Special Civil Applicati....
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....ear by the Legal Thesaurus (Deluxe Edition) by William C Burton, 1979 Edition. The expression "delete" is defined by the Thesaurus as follows: "Delete: - Blot out, cancel, censor, cross off, cross out, cut, cut out, dele, discard, do away with, drop, edit out, efface, elide, eliminate, eradicate, erase, excise, expel, expunge, extirpate, get rid of, leave out, modify by excisions, obliterate, omit, remove, rub out, rule out, scratch out, strike off, take out, weed wipe out." Likewise the expression "omit" is also defined by this Thesaurus as follows:- "Omit:- Abstain from inserting, bypass, cast aside, count out, cut out, delete, discard, dodge, drop exclude, exclude, fail to do, fail to include, fail to insert, fail to mention, leave out, leave undone, let go, let pass, let slip, miss, neglect, omittere, pass over, praetermittere, skip, slight, transire." And the expression "repeal" is defined as follows:- "Repeal:- Abolish, abrogare, abrogate, annul, avoid, cancel, countermand, declare null and void, delete, eliminate, formally withdraw, invalidate, make void, negate, nullify, obliterate, officially withdraw, override, overrule, quash, recall, render in....
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....ry of the compounded levy amount for years 1998-1999 and 1999-2000, because when the impugned order was passed, the provision of Section 3A of the Act read with Rule 96ZP of the Rules and the notification were omitted and repealed in absence of any saving clause with effect from 2001. Rule is made absolute to the aforesaid extent. No order as to costs." • This Tribunal also considering the same issue in Arbuda Alloys Pvt. Ltd. (supra) following the Hon'ble Gujarat High Court judgment Krishna Processor (supra) taken the same view, the relevant order is reproduced below:- "3. After hearing both the sides and on perusal of the records, we find that the main contention of the learned Senior Advocate on behalf of the appellants is that the impugned orders cannot be sustained on the ground that the adjudication proceedings was completed in 2006, long after omission of Section 3A read with Rule 96ZP in 2001, without any saving clause. He submits that the issue is covered by the decision of the Tribunal, in the case of Commissioner of Central Excise, Jaipur v. Alwar Processors Pvt. Limited - 2014 (308) E.L.T. 720 (Tri.-Del.). In that case, by order dated 3-7-2000, the....
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....n which had not been concluded as on 11-5-2001 would lapse. In this case, though, initially the show cause notice issued prior to 1-3-2001 had been adjudicated by the Asstt. Commissioner, the Commissioner (Appeals) had set aside the orders and had remanded the matter for part of the period of dispute to the Asstt. Commissioner for de novo adjudication and de novo proceedings were concluded in 2004, long after omission of Rule 96ZQ with effect from 1-3-2001 and Section 3A with effect from 11-5-2001 without any serving clause and therefore the same would lapse. In view of this, we do not find any merit in the Revenue's appeal. The same is dismissed." • The principal bench of this Tribunal also dealing with the similar case ofAlwar Processors Pvt. Ltd. (supra) has taken the same view as per the following order:- "5. We have considered the submissions from both the sides and perused the records. 6. Though the show cause notices for duty demand of Rs. 45,55,061/- had been issued during the period prior to omission of Rule 96ZQ i.e. prior to 1- 3-2001 and these show cause notices had initially been adjudicated during the period prior to 1-3-2001, on appeal ....
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....f they were not concluded at the time of omission of Section 3A w.e.f. 11-5-2001. In this judgment, the Hon'ble High Court has also considered the judgment of Punjab & Haryana High Court in the case of Shree Bhagwati Steel Rolling Mills v. CCE, Chandigarh reported in 2007 (207) E.L.T. 58 (P & H) and expressed its disagreement. In view of the above judgment of the Hon'ble Gujarat High Court, which is based on the judgment of the Apex Court in the case of Rayala Corporation Ltd. (supra) and Kolhapur Cane Sugar Works Ltd. (supra), after omission of Rule 96ZQ w.e.f. 1-3-2001 and omission of Section 3A of the Act without saving clause w.e.f. 11-5-2007, the proceedings initiated prior to omission which had not been concluded as on 11-5-2001 would lapse. In this case, though, initially the show cause notice issued prior to 1-3-2001 had been adjudicated by the Asstt. Commissioner, the Commissioner (Appeals) had set aside the orders and had remanded the matter for part of the period of dispute to the Asstt. Commissioner for de novo adjudication and de novo proceedings were concluded in 2004, long after omission of Rule 96ZQ w.e.f. 1-3-2001 and Section 3A w.e f. 11-5-2001 without any serving....