Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Dharmendra Textile Processors on 20 September, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT - I
Appeal No.E/1235/2009
Arising out of: OIO No.IV/16-362/MP/98-P, dt.19.01.2005
Passed by: Commissioner of Central Excise & Customs, Ahmedabad
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
Mr. B.S.V. Murthy, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Dharmendra Textile Processors
Respondent:
CCE Ahmedabad Represented by:
Shri Paritosh Gupta, Adv.: for Assessee.
Ms.Mallika Mahajan, Jt.CDR (A.R.): for the Revenue.
CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing/Decision:20.09.12 ORDER No. /WZB/AHD/2012, dt.20.09.12 Per: M.V. Ravindran:
This appeal is directed against Order-in-Original No.IV/16-362/MP/98-P, dt.19.01.2005.
2. The relevant facts that arise for consideration are that the appellant vide their Letter dt.03.04.2000 lodged a claim of abatement of compounded levy for the period 01.03.2000 to 31.03.2000 on the ground that the hot air stenter machine was sealed from 07.02.2000 to 31.03.2000. The said abatement claim was rejected by the Commissioner, Central Excise, Ahmedabad-I, on the ground that during the said period, the factory was not completely closed as provided under Rule 96ZQ(7) of Central Excise Rules, 1944. The said order was challenged by the appellant before Hon'ble High Court of Gujarat, which was entertained by Hon'ble High Court and the letter of Commissioner, Central Excise, Ahmedad-I was set aside. In pursuance of the direction of Hon'ble High Court, Show Cause Notice dt.21.10.2004 was issued to the appellant directing them to show cause as to why their abatement claim be not rejected as provided under Rule 96ZQ (7) of Central Excise Rules, 1944. The adjudicating authority, after following the due process of law, rejected the claim of abatement which is in challenge before us.
3. Ld.Counsel appearing on behalf of the appellant submits that the issue in this now stand abated by the judgment of Hon'ble High Court of Gujarat in the case of Krishna Processors 2012 (280) ELT 186 (Guj.).
4. Ld.D.R. reiterates the findings of the lower authorities.
5. We have considered the submissions made by both sides and perused the records.
6. The issue involved in this case is regarding whether the claim of abatement under Rule 96ZQ (7) of Central Excise Rules, 1944 should have been entertained or not by the adjudicating authority.
7. We find that the entire issue now is non-starter inasmuch as Hon'ble High Court in the case of Krishna Processors (supra) had framed the following questions of law arising before them.
(i) Whether in view of the omission of Rule 96ZQ of the Rules with effect from 1st March, 2001, the adjudicating authority could thereafter have initiated action for breach thereof by issuance of show cause notice and/or could have continued with the proceedings initiated but not concluded prior thereto?
(ii) Whether any obligation or liability incurred under Section 3A of the Act 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?
(vi) Whether the decision of the Supreme Court in the case of Union of India v. Supreme Steels and General Mills Ltd. (supra) concludes the controversy involved in the present case?
8. Out of these six questions of law before Hon'ble High Court, we are concerned with the Question No.(ii). Hon'ble High Court, after going through the entire issue and also the various citations and submissions made before them in Para 18.3 has held as under:-
In the light of the aforesaid discussion, this court is of the view that upon the omission of Rules 96ZQ, 96ZP and 96ZO from the statute book on 1st March, 2001, no action could thereafter have been initiated thereunder. However, in view of the fact that the notification dated 1st March, 2001 amends the Central Excise Rules except as respects things done or omitted to be done by such amendment, the pending proceedings already initiated under Rules 96ZQ, 96ZO and 96ZP could continue. Whereas after the omission of Section 3A of the Act, no action whatsoever could be initiated, continued or taken under the said provision or the rules framed thereunder or framed in respect thereof. In the circumstances, the contention raised on behalf of the petitioners that as vide clause 7 of notification dated 1st March, 2001, Rules 96ZO, 96ZP and 96ZQ were omitted without any saving clause and Section 3A was also omitted vide Section 121 of the Finance Act, 2001 on 11th May, 2001 without any saving clause, all proceedings which were pending as on 11th May, 2001 as regards Rules 96ZO, 96ZP and 96ZQ would thereafter automatically lapse, merits acceptance. Consequently, no orders could have been passed against the petitioners under the said provisions if the actions against the petitioners were not concluded at the time of omission of Section 3A of the Act.
9. Their Lordships, after considering the scope of Rule 96ZQ, in Para 22 categorically ruled as under:-
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, 2001/1st January, 2002 (Special Civil Application No. 1984 of 2002), dated 31st December, 2003 (Special Civil Application No. 3637 of 2004) and dated 30th October, 2001 (Special Civil Application No. 6779 of 2003) are hereby quashed and set aside. Rule is made absolute accordingly in each of the petitions with no order as to costs.
10. From the combined reading of these above reproduced paragraphs from the judgment of Hon'ble High Court, we find that the issue involved in this case is no more alive as the issue is already decided by Hon'ble High Court holding that the provisions of Rule 96ZQ of Central Excise Rules, 1944, which are not in existence, proceedings arising out of the said rule automatically get abated.
11. The appeal is dismissed as abated following the law laid down by Hon'ble High Court of Gujarat, in the case of Krishna Processors (supra).
(Operative portion of the order pronounced in Court)
(B.S.V. Murthy) (M.V. Ravindran)
Member (Technical) Member (Judicial)
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