TMI Blog1985 (11) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ules. The petition also involves, inter alia, another question relating to true scope and construction of Clause 6 of the Notification No. 189/73.C.E., dated 4th October, 1973. 2. The facts of the case which are not in dispute are briefly that M/s. The Kolhapur Sugar Mills Ltd., the Holding Company have been in the business of the production of sugar at Kolhapur since the year 1933-34. The petitioner company was registered as a subsidiary of the aforesaid Holding Company in the year 1972. The Holding Company bifurcated their activities whereby the activity pertaining to manufacture and sale of sugar was transferred to the petitioner company vide a Resolution passed in their Extra-ordinary General Meeting held on 19th October, 1972. 3. Consequent on this change the petitioners on 9th October, 1973 applied to the Assistant Collector,. Central Excise, Kolhapur for L-4 licence. In the covering letter dated 9th October, 1973, the petitioners had stated that they had taken over the sugar undertaking from the Holding Company and it was also intimated that Holding Company was having L-4 licence during the year 1972-73 and they had manufactured sugar during that season and were havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification. Serial No. 6 of the Table reads as follows :- Sugar produced during the period commencing from the first day of October, 1973 and ending with the 30th day of September, 1974 by a factory which commenced production for the first time on or after the first day of October, 1973 which is in excess of 5000 M.T. 6. This rebate claim was scrutinised and after pre-Audit a sum of Rs. 61,14,930 was sanctioned by the Superintendent of Central Excise vide letter dated 23rd July, 1976. It was stated in the order sanctioning the rebate that the amount sanctioned should be credited in the personal ledger account of the petitioners and utilised for payment of Central Excise duty. Copy of this letter of Superintendent of Central Excise was also forwarded to the Assistant Collector of Central Excise, Kolhapur for information. 7. In the meanwhile, the petitioners had also on 22nd August, 1975 filed an appeal against the order dated 26th May, 1975 rejecting the application for rebate under Notification No. 146/74, dated 12th October, 1974. This appeal was, however, later on withdrawn by the petitioners on or about 29th July, 1976. 8. A notice dated 27th April, 1977 was issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the rebate under Serial No. 6 of the Table appended to the Notification No. 189/73 was applicable only to a new factory, namely, one which commenced production for the first time on or after the first day of October, 1973 and that it had no applicability whatsoever to the present case where the factory had been in existence long before the issue of Notification No.. 189/73. 10. Before this order dated 15/27th October, 1977 could be passed by the Assistant Collector, Central Excise, the existing Rules 10 and 10-A of the Central Excise Rules were substituted by new Rule 10. 11. The petitioners went up in appeal to the Appellate Collector vide their appeal dated 14th November, 1977 and the Appellate Collector dismissed the appeal vide order dated 23rd August, 1979. The petitioners thereafter filed a revision application before the Central Government and the Central Government dismissed the revision vide impugned order dated 25th September, 1980. 12. The submissions made by Mr. Falli Nariman, Sr. Advocate accompanied by Sh. G.E. Vahanvati, Advocate learned counsel for the petitioners were briefly as under :- (1) Rules 10 and 10-A were repealed from 6th August, 1977 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be given. (7) (a) In any case Rule 10A had no application to the case and show cause notice wrongly invoked Rule 10A. Rule 10A has no application to cases where assessments had been made and to cases of erroneous refund which were squarely covered by Rule 10. (b) The principle that the mere invoking of a wrong rule is of no consequence does not apply to a case where at the time of passing of the order, Rule 10 to which recourse could otherwise have been made, had ceased to exist. (c) Therefore, the order passed after 6th August, 1977 could not invoke the old rule 10 which had been repealed. (8) That the foundation of an order for recalling a refund of duty must be that it was erroneous ; it must be clear that the duty could never have been refunded under the relevant provisions. And in this behalf it was submitted that the authorities themselves have taken a definite view as expressed in the order dated 26th May, 1975 that the factory was a new factory. This view had become final and cannot be opened. It was held by the Excise Authority that fresh L-4 licence had been granted and factory must be treated as a new factory. The refund was granted after consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory ought to be considered as a new factory because fresh L-4 licence was issued to them by the Department on 6th December, 1973. It was submitted that the petitioner had not suppressed anything from the Department when they initially made their first claim as an old factory in terms of Notification No. 146/74 and yet the Superintendent refused to recognise the factory as a new factory. Thus, their claim for rebate was virtually denied to them. In these circumstances, they were fully entitled to claim rebate as a new factory which is also justified on the merits of the petitioner s case. We are afraid, we are not able to agree with the submission. By the mere fact that the petitioners were granted a fresh L-4 licence by the Department, the factory could not be considered to be a new factory. The licensing procedure under the Central Excise Rules is primarily concerned with a manufacturer and his obligations under the Central Excise laws. No doubt there is a mention of the premises of the factory apart from the name and situation of the owners of the factory who are licenced as such in the licence but the mention of premises is more with a view to identify and connect the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even. The petitioners still thought their claim to be correct and even went up in appeal. Petitioners for reasons known to them withdrew their appeal. There can be no estoppel in such circumstances. The plea of estoppel is a rule of equity and cannot prevail against law. In fact, the Central Government by the impugned order while confirming the orders of the Assistant Collector and the Appellate Collector directed that while the petitioners will pay the amount of Rs. 61,14,930 they may be given interim relief rebate to the extent of Rs. 6,53,572 being their claim as an old factory pending consideration of their application for rebate under Notification No. 146/74 as an old factory. 17. We are in complete agreement with the respondents that the petitioners were not entitled to rebate under Notification No. 189/73. 18. The other submissions may be dealt with together. 19. The rebate as noticed earlier was sanctioned to the petitioners on 23rd July, 1976. The show cause notice for the recovery of the rebate erroneously sanctioned was issued on 27th April, 1977 quoting Rule 10A of the Central Excise Rules. The petitioners have contended that Rules 10 and 10A of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify. It will be noticed that Rule 10A confers residuary powers for recovery of sums due to the Government. It will come into play only where the Rules do not make any specific provision for the collection of any duty or deficiency in duty which has been short levied but the opening part of Rule 10A shows that it comes into play only where there is no other Rule making specific provision for collection of any duty. If Rule 10 applies then Rule 10A will not come into play. Rule 10 applies in two types of cases, one, where excise duty has been short levied on account of any of the causes specified in that Rule and the other where excise duty after having been levied has been owing to any such cause erroneously refunded . In the present case the duty was levied. It was refunded. Therefore, Rule 10 by its own force becomes applicable. The duty was erroneously re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the show cause notice dated 27th April, 1977. Their right to recover their duty is still subsisting. That right, if we may say so, has not yet been taken away. 24. Section 6 of the General Clauses Act (Act No. 10 of 1897) provides for the effect of repeal. The objects of General Clauses Act, 1897 are several, namely, (1) to shorten the language of Central Acts, (2) to provide as far as possible, for uniformity of expression in Central Acts by giving definitions of series of terms in common use (3) to state explicitly certain convenient rules for the construction and interpretation of Central Acts, and (4) to guard against slips and over-sights by importing into Factory Act certain common form clauses, which otherwise ought to be inserted expressly in every Central Act. (See : Law Commission of India, Sixtieth Report, Chapter 1, Para 3). 25. Section 6 of the General Clauses Act, 1897 provides as under :- 6. Effect of repeal.-Where this Act, or any (Central Act) or Regulation made after the Commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a) revive anything not in forc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied in construing the charters of the different High Courts. These charters were granted under statutory powers and are subject to the legislative power of the Indian Legislature. Assuming however, but not conceding, that strictly speaking the provisions of the Interpretation Act and the General Clauses Act do not for any reason apply, there is no justification for holding that the principles of construction enunciated in those provisions have no application for construing these charters. Applying this, it was held in State v. Fateh Chand, AIR 1955 M.B. 82, that, if for some reason or other, the General Clauses Act cannot be applied in terms, its principles (and, in particular, the principle of Section 6) can be extended to construe the law. 28. Madhya Pradesh High Court in the case of Bhupendra Kumar Jain v. Y.S. Dharmadhikari and Others, AIR 1976 M.P. 110 observed, No doubt, Section 13 of the Act is applicable to Central Acts and Regulations only ; but unless the context otherwise requires, the same rule of construction should be applied to the State Bar Council Election Rules framed under the Advocates Act, 1961, which is a Central Act. 29. Govinda Menon, J. in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Interpretation Act of 1889 which provides that a repeal, unless the contrary intention appears, does not affect the previous operation of the repealed enactment or anything duly done or suffered under it and any investigation, legal proceeding or remedy may be instituted, continued or enforced in respect of any right, liability and penalty under the repealed Act as if the Repealing Act had not been passed. Section 6 of the General Clauses Act, as is well known, is on the same lines as Section 38(2) of the Interpretation Act of England. Under Section 30 of the General Clauses Act, which corresponds to Section 27 of the Punjab Act, the provisions of the Act are applicable to Ordinances as well. Of course, the consequences laid down in Section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed. It has no application when a statute, which is of a temporary nature, automatically expires by efflux of time. The Ordinance in the present case was undoubtedly a temporary statute but it is admitted that the period during which it was to continue had not expired when the Repealing Act was passed. The repeal therefore was an eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) Qudrat Ullah v. Municipal Board, Bareilly, AIR 1974 S.C. 396. Para 20 of the judgment in the case of Firm A.T.B. Mehtab Majid and Co. (supra) on which reliance has been placed is as under :- It has been urged for the respondent that if the impugned rule be held to be invalid, old Rule 16 gets revived and that the tax assessed on the petitioner will be good. We do not agree. Once the old rule has been substituted by the new rule, it ceases to exist and it does not automatically get revived when the new rule is held to be invalid. 36. We are afraid that no help can be derived by learned counsel of the petitioners from these observations of Raghubar Dayal, J. In that case Rule 16(2) framed under the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 was challenged as being violative of Article 304(a) of the Constitution. This rule was brought in by way of substitution of an old rule which had been repealed by the new Rule 16 which was challenged as discriminatory. The Supreme Court held that the provisions of new Rule 16(2) were violative of Article 304(a) of the Constitution and were, therefore, void. In that situation counsel for the State of Madras wanted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. 39. Coming to the decision of B.K. Mukherjee, J. in the case of State of Punjab v. Mohar Singh Partap Singh (supra) reliance was placed on paragraph 6 which was reproduced earlier. We have already reproduced portions of the judgment in paragraphs 6, 7 and 8. We are of the opinion that the discussion in that case was in an entirely different context and do not override the principle stated in National Sewing Thread Co. Ltd. v. James Chandwick and Bros. (AIR 1953 S.C. 357). In fact, the decision in the case of State of Orissa and Another v. M/s. M.A. Tulloch and Co. (supra) cited by him does not also support the submissions advanced by Mr. Nariman. It will be noticed that this case raised the question regarding the continued operation of Orissa Mining Areas Development Fund Act (27 of 1952) and the continued exigibility of the fees leviable from mine owners under the said enactment. In this case,the respondents had filed writ petition in Orissa High Court praying for writ if mandamus restraining the State of Orissa from applying the provisions of Orissa Mining Areas Development Fund Act and to direct the appellants to cancel the notices of demand which were served on the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law. 41. It was the same idea that was expressed by Lord Tenterden in Surtees V. Ellison, (1829) 9 and C 750 at p. 752. It has long been established that, when an Act of Parliament is repealed, it must be considered (except as to transactions Past and closed) as if it had never existed. This laid down the law as it was prior to the U.K. Interpretation Act, 1890 which by Section 38 (2) made provision for a saving of the type we now have in Section 6 of the Indian General Clauses Act, 1897 which we have extracted earlier. The submission of Mr. Setalvad, learned counsel for the respondent was very simple. He said that S. 6 on its terms applied only to express repeals. Here we have a case not of an express repeal but of the ...... supersession of a State enactment by a law having by the Constitution superior efficacy. It would, therefore, be a mere disappearance or supersession of the State enactment or at the best a case of an implied repeal. In this connection he invited our attention to som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act have no application except where an Act is repealed. 42. Mr. Setalvad submitted that this was an express decision on the po int in his favour. We are, however, not disposed to agree with the submission apart from its being the basis of a dissenting judgment. We might add that this point as to the effect of an implied repeal has arisen in a few other cases before this Court but it has been left open/see for instance, the judgment in Trust Mai Lachhmi Sialkoti Bradari v. Chairman, Amritsar Improvement Trust Civil Appeal No. 331 of 1961 D/-4-4-1962 (not yet reported: Now reported in AIR 1963 S.C. 976). The question is res Integra and has to be decided on principle. 43. Again in paragraph 21, the Supreme Court observed as under :- We must at the outset point out that there is a difference in principle between the effect of an expiry of a temporary statute and a repeal by a later enactment and the discussion now is confined to cases of the repeal of a statute which until the date of the repeal continues in force. The first question to be considered is the meaning of the expression repeal in Section 6 of the General Clauses Act whether it is confined to cases of express re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here by any inconqrity in attributing to the later legislation the same intent which Section 6 presumes where the word repeal is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is tosted, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principles upon which the rule as to implied repeal rests to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no change intended as is clear from the provisions of new Rule 10 with the context in which we are dealing with these Rules. 47. Provisions of Section 6 of the General Clauses Act do not talk of any vested rights. They merely talk of rights, duties, privileges, obligation or liability or talk of investigation, legal proceeding or remedy in respect of any such right, privilege, obligation or liability. 48. Therefore, on the principles of Section 6 of the General Clauses Act, the rights and obligations of the parties will have to be decided on the basis of continued, application of Rules 10 and 10A. 49. Mr. Nariman also referred to the decision of the Supreme Court in the case of Zohrabi v. Arjuna and others, AIR 1980 S.C. 101 (102) and Narhari Shivram Shet Narvekar v. Pannalal Umediram, AIR 1977 S.C. 164 and submitted that the Supreme Court has taken the view that right to take advantage of provisions of an Act is not accrued right. We fail to understand this submission. If we look at the fact of Zohrabi s case (supra), we will notice that the landlord in that case applied for possession of certain premises on 30th October, 1961. The ejectment was claimed under the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court took the view that the application for possession was made long after the amendment came into force and even the right to institute the proceeding does not appear to have accrued before the amendment because the notice terminating the tenancy was also issued after the proviso was amended. 52. This case has got no applicability whatsoever to the facts of the present case for the simple reason that here the proceedings had been initiated when old Rules 10 and 10A were subsisting. 53. The case of Narvekar (supra) is again of no help to the learned counsel for the petitioners. Here the Supreme Court took the view that the law relating to execution is a procedural law and it was the duty of the trial court to take note of the change in law. The observations of the Supreme Court were made in the light of the facts that a money decree had been passed by Bombay High Court in 1960. The decree was transferred for execution to the Court at Goa after it became a Union Territory of India. Execution application was dismissed by Goa Court on the ground of non-executability of the decree. Pending appeal to the Additional Judicial Commissioner against that order, Indian Code of Civil Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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