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TMI Blog2016 (1) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... Production Capacity under Section 3A of the Central Excise Act. Section 3A required fixation of the capacity of the Furnace by the Commissioner. In 1998, the capacity of the furnace was provisionally fixed by the Commissioner. However, the appellant contested the fixation of capacity on the grounds that they have only one crucible. In March, 1998, the capacity of the production was finally fixed at 5.2 MT. The appellant challenged the order before Tribunal challenging the fixation of capacity and claiming assessment on the basis of actual production. The Tribunal remanded the matter back to the Commissioner. In November, 1998, the Commissioner re-determined the capacity at 4.72 MT. The appellant challenged this order of Commissioner again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., 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? 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. v. 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 appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Counsel also argued in detail about the manner in which the capacity has been calculated and how the certificate of an Engineer produced by them during the adjudication has been ignored and how the formula for calculating volume has been wrongly applied. 3. Learned AR asserted that in the instant case, the SCN has been issued prior to the omission of Section 3A. It has also been adjudicated prior to omission of Section 3A. He asserted that the appellants have declared the higher capacity in the declaration in 1997. He supported the findings of the order. 4 We have considered the rival submissions. Before we go into merits of the case the issue to be decided is if the proceedings initiated under Rule 96ZO survive after omission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the judgments in the case of Rayala Corporation Pvt. Ltd. reported in (1969) 2 SCC 412 and subsequent judgment of the Apex Court in the case of Kolhapur Cane Sugar Works Ltd, reported in 2000 (119) E.L.T. 257 (S.C.) concluded that no proceedings could have been initiate under the omitted Rule 96ZQ after omission of Section 3A w.e.f . 11-5-2001/in absence of any saving clause. The Court further held that all proceedings which were pending as on 11-5-2001, even if initiated prior to omission of Rule 96ZQ would thereafter automatically lapse and no order could be passed if 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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