Important point
Section 6 of the General Clauses Act is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a Rule.

Headnote:(i) Central Excise Rules—Rules 10 and 10A—Central Excise Act—Section 10A r/w General Clauses Act—Section 6—Recovery Proceedings—Show cause notice under Rule 10 for recredit of excise rebate issued on 27.4.1977—Rules 10 and 10A deleted/omitted by notification dated 6.8.1977—New Rule 10 introduced w.e.f. 6.8.1977—Section 11A came to be introduced w.e.f 17.11.1980—Rules did not contain any saving clause—Final order for recredit passed on 15/27-10-1977—Held : Proceedings initiated under deleted/omitted rules lapsed after 6.8.1977 —Provisions of Section 6 of General Clauses Act not applicable—Order passed after 6.8.1977 became non-est—Action could be taken under new provisions.
       The question that arises for determination is whether after omission of the old Rules 10 and 10A and its substitution by the new Rule 10 by the Notification No. 267/77 dated 6.8.77 the proceedings initiated by the notice dated 27.4.77 could be continued in law. If the question is answered in the affirmative then the order dated 15/27th October, 1977 of the Asstt. Collector of Central Excise confirming the demand for re-credit of the amount of Rs. 61,41,930/- cannot be interfered with. On the other hand, if the question is answered in the negative then the said order is to be taken as non-est. (Para 12)
       Is directly on the question of applicability of Section 6 of the General Clauses Act in a case where a rule is deleted or omitted by a notification and the question was answered in the negative. The Constitution Bench said that “Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a Rule”. (Para 32)
        In the case in hand Rule 10 or Rule 10-A is neither a “Central Act” nor a “Regulation” as defined in the Act. It may be a Rule under section 3(51) of the Act. Section 6 of the General Clauses Act is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a “Rule”. (Para 37)
       In the present case, as noted earlier, Section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceeding. Therefore action for realisation of the amount refunded can only be taken under the new provision in accordance with the terms thereof. (Para 39)
       The further question that arises for consideration in this connection is whether the notification No. 267/77 dated 6.8.77 by which Rule 10 was deleted contained any provision for continuance of the proceedings already initiated and whether Act 25 of 78 which introduced Section 11-A of the Central Excise Act, adopted the legal device of creating a fiction by virtue of which a proceeding under Rule 10 could be deemed to be a proceeding under Section 11-A of the Act. If such was the position then it could be argued that the proceeding initiated when old Rule 10 was in force could be continued on the strength of the clause of the notification by which the said Rule was omitted and substituted by a new Rule which in turn was substituted by section 11-A of the Act. From the contents of the provisions in the Rules it is clear that it did not contain any saving clause for continuance of the proceeding initiated under the rule which was deleted/omitted. There is also no provision in Section 11-A or in any other Section of the Act saving the proceedings initiated under the deleted/omitted provision. The consequential position that follows is that the proceeding lapsed after 6th August 1977 and any order passed in the proceeding thereafter is to be treated as non-est. In case the notice was issued after Section 11-A was introduced in the Act, the proceeding will continue and will not be affected by this decision. (Paras 40 & 41)
       (ii) General Clauses Act—Section 6—Scope and application of section—It is not applicable in the case of omission of a Rule—It is applicable where any Central Act or Regulation made after Commencement of General Clauses Act repeals any enactment.
       When the legislature by clear and unambiguous language has extended the provision of section 6 to cases of repeal of a ‘Central Act’ or ‘Regulation’, it is not possible to apply the provision to a case of repeal of a ‘Rule’. The position will not be different even if the rule has been framed by virtue of the power vested under an enactment; it remains a ‘rule’ and takes its colour from the definition of the term in the Act (General Clauses Act). (Para 33)
       It is not correct to say that in considering the question of maintainability of pending proceedings initiated under a particular provision of the rule after the said provision was omitted the Court is not to look for a provision in the newly added rule for continuing the pending proceedings. It is also not correct to say that the test is whether there is any provision in the rules to the effect that pending proceedings will lapse on omission of the rule under which the notice was issued. It is our considered view that in such a case the Court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari-material provision in the statute under which the rule has been framed in that case also the pending proceeding will not be affected by omission of the rule. In the absence of any such provision in the statute or in the rule the pending proceedings would lapse on the rule under which the notice was issued or proceeding was initiated being deleted/omitted. (Para 35)
       Section 6 is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a “Rule”. (Para 37)
       The position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision. (Para 38)

Judgement Key Points

Based on the provided legal document, the key issue pertains to the applicability of Section 6 of the General Clauses Act in the context of the omission or deletion of Rules 10 and 10-A of the Central Excise Rules. The court clarifies that Section 6 is applicable only when there is a repeal of a Central Act or Regulation made after the commencement of the General Clauses Act, and it does not extend to the omission or deletion of a Rule (!) (!) (!) .

Furthermore, the document emphasizes that Rules are distinct from statutes or regulations and that their omission or deletion does not automatically invoke the provisions of Section 6. In the absence of a specific saving clause in the notification or the rules themselves, pending proceedings initiated under the omitted rules are considered to lapse after the rules are deleted or omitted (!) (!) (!) .

Additionally, the court discusses the importance of examining the provisions of the newly introduced rules or statutes to determine whether they contain explicit provisions for the continuation of pending proceedings. If such provisions are absent, the proceedings initiated under the previous rules or provisions are deemed to have expired or become non-est (!) (!) .

In this case, since the rules were omitted without a saving clause, and the subsequent legislation did not provide for the continuation of proceedings initiated under the omitted rules, the proceedings in question are considered to have lapsed after the omission took effect. The court also notes that the omission of rules does not affect any rights or liabilities that have already been duly enforced or accrued before the omission (!) (!) (!) .

Therefore, the overarching principle derived from this document is that the applicability of Section 6 of the General Clauses Act is limited to cases of repeal of statutes or regulations, and it does not extend to the omission or deletion of rules unless there is a specific legislative intent or saving provision to the contrary. In the absence of such provisions, pending proceedings under omitted rules are deemed to have lapsed, and new proceedings must be initiated under the current statutory framework.

JUDGMENT

D.P. Mohapatra, J.—Leave granted in S.L.P. (Civil) No. 16223/1985.

2. The common question raised in all these cases relates to the applicability of Rules 10 and 10-A of the Central Excise Rules. The cases were heard together with the consent of learned counsel for parties and they are being disposed of by this common judgment. For the sake of brevity the relevant facts are stated with reference to Civil Appeal No. 2132 of 1994 :

3. M/s. Kolhapur Sugar Mills Limited, a holding company, had been in the business of production of sugar at Kolhapur since the year 1933-34. The appellant M/s. Kolhapur Cane Sugar Works Ltd. was registered as a subsidiary of the said 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 appellant company by a Resolution passed in their Extra-ordinary General Meeting held on 19th October, 1972. Consequent upon this change the appellant, on 9th October 1973 applied to the Assistant Collector, Central Excise, Kolhapur for L-4 licence for manufacture of sugar. In the covering letter the appellant had stated that they had taken the sugar undertaking from the holding company. It was also stated in the letter that the holding company was having L-4 licence during the year 1972-73 and that they had manufactured sugar during that season and were having their sugar stocks in the godowns now belonging to the appellant. On receipt of the letter necessary certificate was issued to the appellant to start business on 15.11.1973 pending issue of L-4 licence. A fresh L-4 licence authorising the appellant to manufacture sugar during the year ending 31st December, 1973 was issued on 6th December, 1973 in pursuance of their application.

4. On 9th August, 1974 the appellant sent a letter to the Superintendent, Central Excise, Kolhapur asking him whether the company were entitled for a rebate of excise duty on sugar admissible for the season 1973-74 on the ground that they had commenced manufacture of sugar for the first time during the season 1973-74. They were informed by the Superintendent, Central Excise, Kolhapur by letter 23.9.1974 that their factory did not figure in the list of new factories; therefore, they did not come within the scope of the Notification No. 189/73 and they would not be entitled for the sugar incentive rebate on excise duty on account of excess production of sugar for the year 1973-74 season.

5. On 7th December, 1974, the appellant applied for rebate on excess production for the year 1974-75 on the basis of the Notification No. 146/74 dated 12th October, 1974. This claim of rebate was for the amount Rs. 6,53,472/- on excess production of sugar within two months, October and November, 1974. The Superintendent, Central Excise, Kolhapur by his letter dated 26th May, 1975 informed the appellants that since a fresh L-4 licence was issued to them, their factory will have to be treated as a new unit, and therefore, the rebate claim filed as an old unit could not be entertained.

6. Subsequently, the appellants made an application for grant for incentive rebate on the sugar manufactured by them in terms of the Notification No. 189/73 dated 4th October, 1973. This rebate claim was scrutinised and after pre-audit a sum of Rs. 61,14,930/- was sanctioned by the Superintendent, Central Excise, Kolhapur, 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 appellants and utilised for payment of Central Excise duty.

7. In the meanwhile the petitioner had also 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 later on withdrawn by the appellants on or about 29th July, 1976.

8. As the matter stood thus the notice dated 27th April, 1977 was issued by the Superintendent, Ce

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2000 Supreme(SC) 249

Important pointSection 6 of the General Clauses Act is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a Rule.

Cases Referred (7)

Important point
Section 6 of the General Clauses Act is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a Rule.