9911796707
TMI Blog2005 (11) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No. E/2246/03 is against the confirmation of duty of Rs. 97,62,588/- (Rupees Ninety seven lakhs sixty two thousand five hundred eighty eight only) raised in five show cause notices consequent to determination of Actual Capacity of Production under Rule 96ZO(3) of the Central Excise Rules and penalty of equal amount. 3. We have heard both sides. The appellants contend that since Section 3A of the Central Excise Act which is the parent provision for Rule 96ZO has been omitted vide Section 121 of the Finance Act, 2001 w.e.f. 11-5-2001 without any saving clause, pending proceedings cannot be continued. In this connection they rely upon the Tribunal's recent order - Final Order No. A/1444-1446/WZB/2005 C-III, dt. 29-6-2005, in Appeal No. E/3461/03 in which the Tribunal has accepted this contention. 4. We have carefully perused the above order, a copy of which is placed before us. The relevant extract from that order is reproduced below :- (a) The appellants have contested the initiation & continuation of proceedings, under Rule 96ZO(3), as arrived, on Ground omission of Section 3A & Rule 96ZO. Considering the submissions, it is to be held - (i) &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under Section 3A which are pending for assessment after 11-5-2001 the date of omission could not be therefore be proceeded with much less adjudicated. Therefore the Order-in-Original needs to be set aside in its entirety. (viii) The substantive mother provision for Rule 96ZO is undoubtedly Section 3A. Thus Section 3A was omitted w.e.f. 11-5-2001 by Finance Act, 2001.'Vide Notification No. 24/97-C.E. (N.T.), dated 25-7-1997, the Central Government framed Induction Furnace Annual Capacity Determination Rules, 1997 (hereafter referred as 1997 Rules) in exercise of powers conferred by Section 3A(2) of the Central Excise Act, 1944. Notification No. 16/2000 C.E. (N.T.), dated 1-3-2000 rescinded Notification No. 24/97-C.E.(N.T.), dt 25-7-1997. Vide Notification No. 6/2001-C.E. (N.T.), dated 1-3-2001, the Central Government made the Central Excise (Third Amendment) Rules, 2001. Rule 7 of these Rules, inter alia, omitted Rule 96ZO. In other words, the 1997 Rules and Rule 96ZO were abrogated even before Section 3A was 'omitted'. However such prior abrogation of sub-ordinate legislation is not material is plea, to be upheld. Suppose the 1997 Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etics Ltd v. CTD that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf." And after perusal of Section 37(1) Central Excise Act, 1944, which is only a general rule making power conferred cannot be read and relied to upon to uphold the delegated 'interest clause in Rule 96ZO(3)' as pleaded by ld. DR. The decision of the Supreme Court in Kunj Behari Lal & Ors. v. State of H.P. - 2000 (3) SCC 40 wherein it was held as - "14. We are also of the opinion that a delegated power to legislate by making rules "for carrying out the purpose of the Act" is a general delegation without laying down any guidelines; it cannot be so disabilities nor contemplated by the provisions of the Act itself". And More so, when we find that Section 37(2) of the Central Excise Act, 1944 was specifically amended to bring in penalty & interest provisions on Modvat Credits when Clause XVIC was inserted in Section 37(2) vide amendment by Finance Act, 1995 & Notification 25/95 C.E. (N.T.), dt 31-5-95 then issued or Clause 1(bb) added vide Finance Act, 1999 to bring in interest under Rule 9B. Therefore, amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rules made under sub-section (1), to carry out the purposes of the Central Sales Tax Act, 1956. The High Court rejected the Revenue's contention and held that "unless the statute expressly authorizes the Rules to create a penal liability, the rule-making authority would have no jurisdiction to create a penal liability". The High Court relied upon following judgments for reaching to above, conclusion : (a) Guldas Narasappa Thimmiah Oil Mills v. CST - 1970 (25) STC 489 (Mys.) (b) Shri Mohan Lal Chokany v. CTO - 1971 (28) STC 367 (Cal.) (c) Hurdatroy Jute Mills v. Superintendent of Commercial Taxes - 1972 (30) STC 151 (Pat.). (i) The power under Section 37(3) of the Central Excise Act, 1944 is already exhausted by the Central Government by enacting Central Excise Rules, 1944 and hence cannot be a source relevant for enacting penalty under Rule 96ZO(3). (ii) The provisions of Clause (b) and Clause (c) of sub-section 4 of Section 37 of Central Excise Act, 1944 are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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