Sections 6 & 12 of the CEA'44 - no longer relevant while making rules?
The poser carried by us in our of 7th December 2007 attracted a couple of replies over the weekend.
Before we tell you the answer, just take a look at some interesting replies, though all may apparently seem to be right in their own right!
++ It is just a drafting error, no problem, let the Board issue another notification prescribing the new Central Excise Rules, 2007 by referring to all the three sections & as for the earlier period section 38A will take care.
++ The Central Excise Rules were framed before Independence and when the Government got the opportunity to frame a new set of Rules in the year 2001, they wanted it to be different & free of British legacy.
Yet another Netizen responded,
The preamble to the erstwhile Central Excise Rules, 1944 was - In exercise of the powers conferred by sections 6,12 and 37 of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government is pleased to apply in the adapted form set out below certain provisions of the Sea Customs Act, 1878 (VIII of 1878), and to make the following rules for the purpose of providing for the assessment and collection of the duties imposed by the first mentioned Act.
Section 37(1) of the Central Excise Act, 1944 lays that the Central Government can make rules to carry into effect the purposes of the Central Excise Act. So also, in terms of sub-section (2) such rules can be may be made for covering particular situations as mentioned there under. This sub-section (2) has seen amendments by the dozen to lay down the framework for the rules & no rule can obviously trespass the limits mentioned in the various clauses to this sub-section.
This would mean that Section 37 is an encompassing section.
Omission of reference to Section 6 of the Act
- The earlier Section 6 was substituted by section 113 of the Finance Act, 1992 (w.e.f 14.5.1992) & it entails registration by a prescribed person, the word "prescribed" being defined in Section 2(g) of the CEA'44 to mean 'prescribed by rules made under this Act'. Since the contents of Section 6 have been carried into effect by the Central Excise Rules, 2002/2002 issued in exercise of the powers conferred by Section 37, there no longer exists a need to refer to Section 6 in the Preamble to the new Rules.
Section 12 - Omission of Reference in the CER 2001/2002:
Section 12, as it existed earlier, laid down that the provisions of the Sea Customs Act, 1878 are to be made applicable to Central Excise duties with such modifications and alterations. Since the Sea Customs Act, 1878 was repealed & replaced by the Customs Act, 1962 (Act no. 52 of 1962), obviously the reference made in the preamble to the Central Excise Rules, 1944 lost its relevance after the Customs Act was enacted. Importantly, the CER 1944 were made when the Section 12 existed in its earlier avatar & when it referred to the Sea Customs Act, 1878. Similarly, notification 69/59 dated 18.07.1959 (G.S.R No. 822 of 1959) extended the provisions of the Sea Customs Act, 1878 to the Central Excise duties & with the coming into force of the Customs Act, 1962, Notification 68/63 dated 04.05.1963 was issued to a like effect.
Incidentally, Section 12 of the CEA'44 omitted the reference to the Sea Customs Act, 1878 only after the amendment by Section 78 of the Finance (No.2) Act, 1996 [w.e.f 28.09.1996]. No doubt, such late amendment did not cause any damage for the earlier period in view of the Supreme Court decision in New Central Mills Co. Ltd. vs. ACCE, AIR 1971 SC 454, 456 wherein it is held that Section 8(1) of the General Clauses Act, 1897 takes care of the situation inasmuch as in Section 12 of the CEA'44, the Customs Act, 1962 can be read in place of Sea Customs Act, 1878.
At the first available opportunity the Central Government shed the heavy luggage of the Central Excise Rules, 1944 and in supersession of the same came out with a fresh set of sleek rules catering to various situations viz. the Central Excise Rules, 2001, Cenvat Credit Rules, 2001 etc. w.e.f 01.07.2001.
In view of the justification given above, these new rules are required to carry reference to section 37 of the CEA'44 and nothing more.
We are thankful to the Netizen who sent us this reply.