1985 (11) TMI 137 - HC - Central Excise

Summary

Issues Involved:

1. Effect of repeal of Rules 10 and 10-A of the Central Excise Rules, 1944.
2. True scope and construction of Clause 6 of Notification No. 189/73.C.E., dated 4th October, 1973.
3. Entitlement of the petitioners to rebate under Notification No. 189/73.
4. Jurisdiction and applicability of Section 6 of the General Clauses Act to the repeal of statutory rules.

Summary:

1. Effect of repeal of Rules 10 and 10-A:

The petitioners argued that the substitution of old Rules 10 and 10-A by new Rule 10 u/s 6th August 1977 rendered the old rules non-existent. They contended that further proceedings were without jurisdiction as the Notification did not contain a saving clause, and Section 6 of the General Clauses Act was inapplicable because it does not apply to the repeal of statutory rules. The court held that the principles of Section 6 of the General Clauses Act are applicable even to the repeal of statutory rules and that the rights and obligations under the old rules continue unless a different intention appears in the new rule.

2. True scope and construction of Clause 6 of Notification No. 189/73.C.E.:

The court examined Clause 6 of the Notification, which provided for a rebate on sugar produced by a factory that commenced production for the first time on or after 1st October 1973. The petitioners claimed entitlement to this rebate, arguing that their factory should be considered new due to the issuance of a fresh L-4 licence. The court rejected this claim, stating that the factory had been in existence since 1933-34 and merely underwent a change in ownership. The factory could not be considered new for the purposes of the Notification.

3. Entitlement to rebate under Notification No. 189/73:

The petitioners initially applied for a rebate as an old factory under Notification No. 146/74, which was denied. They then applied as a new factory under Notification No. 189/73 and were erroneously granted a rebate of Rs. 61,14,930. The court held that the rebate was erroneously granted as the factory did not meet the criteria of commencing production for the first time on or after 1st October 1973. The petitioners' factory was not new and hence not entitled to the rebate.

4. Jurisdiction and applicability of Section 6 of the General Clauses Act:

The petitioners argued that the repeal of Rules 10 and 10-A without a saving clause rendered the proceedings void. The court applied the principles of Section 6 of the General Clauses Act, stating that the repeal does not affect any right, privilege, obligation, or liability acquired under the repealed enactment. The court held that the proceedings initiated under the old rules could continue under the new rule, and the erroneous rebate granted could be recovered.

Conclusion:

The court dismissed the petition, holding that the petitioners were not entitled to the rebate under Notification No. 189/73, and the principles of Section 6 of the General Clauses Act allowed the continuation of proceedings initiated under the old rules. The erroneous rebate granted was recoverable, and the substitution of the old rules by the new rule did not obliterate the obligations and liabilities incurred under the old rules.