# M/S. SH REE BHAGWATI STEEL ROLLING MILLS v. COMMISSIONER OF CENTRAL EXCISE &ANR

- **Citation:** [2015] 12 S.C.R. 332
- **Court:** Supreme Court of India
- **Decided:** 2015-11-24
- **Case number:** Civil Appeal No.4280 of 2007
- **Bench:** A.K. Sikri, ROHINTON FALi NARIMAN
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-sh-ree-bhagwati-steel-rolling-mills-v-commissioner-of-central-excise-anr-30370
- **Pages:** 37

## Headnote

Central Excise Act, 1944: s.3A - Compounded levy
c scheme- Interest for delayed payment of central excise duty
u/s.3A - Held: Since s.3A which provides for a separate
scheme does not itself provide for levying of interest, rr 96ZO,
96ZP, 96ZQ cannot do so - None of the other provisions of
the Central Excise Act can come to the aid of the revenue in
D such case - This is a comprehensive scheme in itself and
general provisions in the Act and the Rules are excluded.
Central Excise Rules, 1944: rr96ZO, 96ZP, 96ZQ -
Constitutional validity of - Held: These rules prescribe
E imposition of penalty equal to the amount of duty outstanding
without any discretion to reduce the same depending upon
the time taken to deposit the duty- They were not only ultra
vires the Act but they were arbitrary and unreasonable and
violative of Article 14 and 19(1)(g) of the Constitution -
F Constitution of India, 1950-Articles 14, 19.
Induction Furnace Annual Capacity Determination
Rules, 199 7: r. 3(2) - Annual capacity of production -
Relevant consideration -
Held: Chartered Engineer
G Certificate dealing with the sanctioned electrical load for a
furnace is a relevant consideration which can be looked at in
the absence of other factors mentioned in r 3.
Repeal: Omission is a form of repeal -A repeal would
H include a repeal by way of an express omission -A conjoint
332
J
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
333
OF CENTRAL EXCISE
reading of the three expressions "delete", "omit", and "repeal", A
shows that "delete" and "omit" are used interchangeably, so
that when the expression "repeal" refers to "delete" it would
necessarily take within its ken an omission as well - General
Clauses Act, 1897 - s. 6.
Words and phrases: Omission, delete and repeal -
Meaning of -Discussed.
Disposing of the appeals, the Court
B
HELD: 1.1. When Section 6 speaks of the repeal of C
any enactment, it refers not merely to the enactment as
a whole but also to any provision contained in any Act.
Thus, if a part of a statute is deleted, Section 6 would
nonetheless apply. Secondly, the expression "omission" 0
is nothing but a particular form of words evincing an
intention to abrogate an enactment or portion thereof. A
conjoint reading of the three expressions "delete",
"omit", and "repeal", shows that "delete" and "omit" are
used interchangeably, so that when the expression E
"repeal" refers to "delete" it would necessarily take within
its ken an omission as well. This being the case, there is
no substance in the argument that a "repeal" amounts
to an obliteration from the very beginning, whereas an
"omission" is only in futuro. If the expression "delete" F
would amount to a "repeal", it is clear that a conjoint
reading of Halsbury's Laws of England and the Legal
Thesaurus both lead to the same result, namely that an
"omission" being tantamount to a "deletion" is a form
of repeal. [Paras 13, 14] [344-E-G; 345-F-H; 346-A]
G
Halsbury's Laws of England; Legal Thesaurus
(Deluxe edition) by William C Burton 1979 Edition
- referred to.
H
334
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A
1.2. When this Court referred to Section GA in Fibre
Board's case and held that Section GA shows that a repeal
can be by way of an express omission, obviously what
was meant was that an amendment which repealed a
provision could do so by way of an express omission.
B This being the case, it is clear that Section GA
undisputedly leads to the conclusion that a repeal would
include a repeal by way of an express omission. Fibre
Board's case clarifies the law in holding that an omission
would amount to a repeal. The converse view of the law
C has led to an omitted provision being treated as if it never
existed, as Section G of the General Clauses Ac;t would
not then apply to allow the previous operation of the
provision so omitted or anything duly done or suffered
0 . thereunder. Nor may a legal proceeding in respect of any
right or liability be instituted, continued or enforced in
respect of rights and l

## Text

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[2015] 12 S.C.R. 332
A
M/S. SH REE BHAGWATI STEEL ROLLING MILLS
B
v.
COMMISSIONER OF CENTRAL EXCISE &ANR.
(Civil Appeal No.4280 of 2007)
NOVEMBER 24, 2015
[A.K. SIKRI AND ROHINTON FALi NARIMAN, JJ.)
Central Excise Act, 1944: s.3A - Compounded levy
c scheme- Interest for delayed payment of central excise duty
u/s.3A - Held: Since s.3A which provides for a separate
scheme does not itself provide for levying of interest, rr 96ZO,
96ZP, 96ZQ cannot do so - None of the other provisions of
the Central Excise Act can come to the aid of the revenue in
D such case - This is a comprehensive scheme in itself and
general provisions in the Act and the Rules are excluded.
Central Excise Rules, 1944: rr96ZO, 96ZP, 96ZQ -
Constitutional validity of - Held: These rules prescribe
E imposition of penalty equal to the amount of duty outstanding
without any discretion to reduce the same depending upon
the time taken to deposit the duty- They were not only ultra
vires the Act but they were arbitrary and unreasonable and
violative of Article 14 and 19(1)(g) of the Constitution -
F Constitution of India, 1950-Articles 14, 19.
Induction Furnace Annual Capacity Determination
Rules, 199 7: r. 3(2) - Annual capacity of production -
Relevant consideration -
Held: Chartered Engineer
G Certificate dealing with the sanctioned electrical load for a
furnace is a relevant consideration which can be looked at in
the absence of other factors mentioned in r 3.
Repeal: Omission is a form of repeal -A repeal would
H include a repeal by way of an express omission -A conjoint
332
J
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
333
OF CENTRAL EXCISE
reading of the three expressions "delete", "omit", and "repeal", A
shows that "delete" and "omit" are used interchangeably, so
that when the expression "repeal" refers to "delete" it would
necessarily take within its ken an omission as well - General
Clauses Act, 1897 - s. 6.
Words and phrases: Omission, delete and repeal -
Meaning of -Discussed.
Disposing of the appeals, the Court
B
HELD: 1.1. When Section 6 speaks of the repeal of C
any enactment, it refers not merely to the enactment as
a whole but also to any provision contained in any Act.
Thus, if a part of a statute is deleted, Section 6 would
nonetheless apply. Secondly, the expression "omission" 0
is nothing but a particular form of words evincing an
intention to abrogate an enactment or portion thereof. A
conjoint reading of the three expressions "delete",
"omit", and "repeal", shows that "delete" and "omit" are
used interchangeably, so that when the expression E
"repeal" refers to "delete" it would necessarily take within
its ken an omission as well. This being the case, there is
no substance in the argument that a "repeal" amounts
to an obliteration from the very beginning, whereas an
"omission" is only in futuro. If the expression "delete" F
would amount to a "repeal", it is clear that a conjoint
reading of Halsbury's Laws of England and the Legal
Thesaurus both lead to the same result, namely that an
"omission" being tantamount to a "deletion" is a form
of repeal. [Paras 13, 14] [344-E-G; 345-F-H; 346-A]
G
Halsbury's Laws of England; Legal Thesaurus
(Deluxe edition) by William C Burton 1979 Edition
- referred to.
H
334
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A
1.2. When this Court referred to Section GA in Fibre
Board's case and held that Section GA shows that a repeal
can be by way of an express omission, obviously what
was meant was that an amendment which repealed a
provision could do so by way of an express omission.
B This being the case, it is clear that Section GA
undisputedly leads to the conclusion that a repeal would
include a repeal by way of an express omission. Fibre
Board's case clarifies the law in holding that an omission
would amount to a repeal. The converse view of the law
C has led to an omitted provision being treated as if it never
existed, as Section G of the General Clauses Ac;t would
not then apply to allow the previous operation of the
provision so omitted or anything duly done or suffered
0 . thereunder. Nor may a legal proceeding in respect of any
right or liability be instituted, continued or enforced in
respect of rights and liabilities acquired or incurred
under the enactment so omitted. In the vast majority of
cases, this would cause great public mischief, and the
E decision of Fibre Board's case is therefore clearly
delivered by this Court for the public good, being, at the
very least a reasonably possible view. Also, no aspect
of the question at hand has remained unnoticed. The
persuasive plea of the counsel to reconsider the
F judgment in Fibre Board's case is declined. This being
the case, it is clear that on point one the present appeal
would have to be dismissed as being concluded by the
decision in the Fibre Board's case. [Paras 1G, 24) [347F-G; 353-H; 354-A-B]
G
1.3. Even on the point of limitation, the High Court
noticed that the assessee undertook to pay the amount
with interest upto 31.3.2003, on which date a last part
payment was made. As the demand was raised. by the
H Department on 19.8.2005 i.e. within a period of three years
SH REE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
335
OF CENTRAL EXCISE
from 31.3.2003, it is clear that the said recovery notice A
would not be beyond the time limit. [Para 25] [354-C-D]
1.4. Since Section 3A which provides for a separate
scheme for availing facilities under a compound levy
scheme does not itself provide for the levying of interest, B
Rules 96 ZO, 96 ZP and 96 ZQ cannot do so and therefore
on. this ground the appellant has to succeed. On this
ground alone therefore the impugned judgment is set
aside. None of the other provisions of the Central Excise
Act can come to the aid of the Revenue in cases like C
these. [Para 31] [358-D-E]
2.1. On the facts before the Gujarat High Court, there
were three civil applications each of which challenged
the constitutional validity of the Rules 96ZO, 96ZP, 96ZQ o
insofar as they prescribed the imposition of a penalty
equal to the amount of duty outstanding without any
discretion to reduce the same depending upon the time
taken to deposit the duty. The Gujarat High Court struck
down the aforesaid Rules on the basis that not only were E
they ultra vires the Act but they were arbitrary and
unreasonable and therefore violative of Articles 14 and
19(1)(g) of the Constitution. Insofar the reasoning of the
High Court is concerned, on three counts it is
unexceptionable. First and foremost, a delay of even F
one day would straightaway, without more, attract a
penalty of an equivalent amount of duty, which may be
in crores of rupees. It is clear that as has been held by
this Court, penalty imposable under the aforesaid three
Rules is inflexible and mandatory in nature. The High G
Court is, therefore, correct in saying that an assessee
who pays the delayed amount of duty after 100 days is
to be on the same footing as an assessee who pays the
duty only after one day's delay and that therefore such H
336
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A rule treats unequals as equals and would, therefore,
violate Article 14 of the Constitution of India. It is also
correct in saying that there may be circumstances of
force majeure which may prevent a bonafide assessee
from paying the duty in time, and on certain given factual
B circumstances, despite there being no fault on the part
of the assessee in making the deposit of duty in time, a
mandatory penalty of an equivalent amount of duty
would be compulsorily leviable and recoverable from
such assessee. This would be extremely arbitrary and
C violative of Article 14 for this reason as well. Further,
this would also be violative of the appellant's
fundamental rights under Article 19(1 )(g) and would not
be saved by Article 19(6), being an unreasonable
0
restriction on the right to carry on trade or business.
Clearly the levy of penalty in these cases of a mandatory
nature for even one day's delay, which may be beyond
the control of the assessee, would be arbitrary and
excessive. The direct and immediate impact upon the
E fundamental right of the citizen is that he is exposed to
a huge liability by way of penalty for reasons which may
in given circumstances be beyond his control and/or for
delay which may be minimal. The possibility of achieving
the object of deterrence in such cases can be achieved
F by imposing a less drastic restraint. [Paras 33, 35, 36)
[359-E-F; 360-B-G; 361-E-F]
2.2. Under Section 37(3), the statute itself provides
in all cases where no other penalty is provided by the
G Act that a penalty not exceeding Rs.5,000/- alone can be
levied. Sub-Section(4) is even more telling. Even in cases
where there is a clandestine removal of excisable goods,
and cases where the assessee intends to evade payment
of duty, the assessee is liable to a penalty not exceeding
H the duty leviable on such goods or Rs.10,000/-whichever
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
337
OF CENTRAL EXCISE
is greater. It will be noticed that the Act is very A
circumspect in laying down penalty provisions.
Penalties in given circumstances extend only to
Rs.5,000/- and Rs.10,000/- which are small amounts.
Further, even where clandestine removal and intent to
evade duty are present, yet the authorities are given a B
discretion to levy a penalty higher than Rs.10,000/- but
not exceeding the duty leviable. In a given case,
therefore, even where there is willful intent to evade duty
and the duty amount comes to say a crore of rupees,
the authorities can in the facts and circumstances of a C
given case, levy a penalty of say Rs.25,00,000/- or
Rs.50,00,000/-. This being the position, it is clear that
when contrasted with the provisions of the Central
Excise Act itself, the penalty provisions contained in D
Rules 96ZO, 96 ZP and 96 ZQ are both arbitrary and
excessive. A penalty can only be levied by authority of
statutory law and Section 37 of the Act does not expressly
authorize the Government to levy penalty higher than
Rs.5,000/-. This further shows that imposition of a E
mandatory penalty equal to the amount of duty not being
by statute would itself make Rules 96ZO, 96 ZP and 96 ·
ZQ without authority of law. Therefore, Rules 96ZO, 96
ZP and 96 ZQ "are struck down insofar as they impose a
mandatory penalty equivalent to the amount of duty on
F
the ground that these provisions are violative of Article
14, 19(1)(g) and are ultra vires the Central Excise Act.
[Paras 38, 39) [362-G-H; 363-A-F]
3. In SLP(C) 22134 of 2000, the assessee made the G
declaration that they will pay lump sum duty on the basis
that their induction furnace has a capacity of only 3.2.
metric tons. As they were unable to trace out the original
bill, they worked out their capacity on the basis of
Chartered Engineer's Certificate which was not accepted H
338
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A by the authorities. The load capacity of an induction
furnace unit is certainly relevant material referred to in
Rule 3(2) to determine the capacity of the furnace
installed. It is obvious that it is not necessary to state
such load capacity in terms for it to be included in Rule
B 3(2).
Chartered Engineer Certificate dealing with the
sanctioned electrical load for a furnace is a relevant
consideration which can be looked at in the absence of
other factors mentioned in Rule 3. [Para41, 42 and 43)
C [364-F-G; 366-A; 367-E-G]
Hans Steel Rolling Mill v. CCE 2011 (3) SCR 841
: (2011) 3 sec 748 - relied on.
VVS Sugars v. Government of A. P. 1999 (2) SCR
o
925: 1999 (4) sec 192 - followed.
Mis Fibre Boards (P) Ltd., Bangalore v.
Commissioner of Income Tax, Bangalore [2015)
376 ITR 596 (SC); Raya/a Corporation (P) Ltd. &
E
Ors. v. Director of Enforcement, New Delhi 1970
(1) SCR 639 : 1969 (2) SCC 412; Bhagat Ram
Sharma v. Union of India 1988 SCR 1034 :1988
Supp SCC 30; Keshav Mills Co. Ltd, v. CIT,
Bombay North 1965 (2) SCR 908; Bhartidasan
F
University and Another v. All-India Council for
Technical Education 2001 (3) Suppl. SCR 253 :
2001 (8) SCC 676; Krishna Processors v. Union
oflndia 2012 (280) ELT 186 (Guj.); Md. Faruk v.
State of M.P.1970(1) SCR 156; Bhuwalka Steel
G
Industries Ltd. v. Union of India 2003(159) ELT
147 (Kar.)- referred to.
Case Law Reference
H [2015) 376 ITR 596 (SC)
referred to
Para 7
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
339
OF CENTRAL EXCISE
1970 (1) SCR 639
referred to
Para 9
A
1988 SCR 1034
referred to
Para 15
1965 (2) SCR 908
referred to
Para 23
2001 (3) Suppl. SCR 253
referred to
Para 28
B
1999 (2) SCR 925
followed
Para 30
2011 (3) SCR 841
relied on
Para 31
2012 (280) ELT 186 (Guj.)
referred to
Para 32
c
1970 (1) SCR 156
referred to
Para 35
2003 (159) ELT 147 (Kar.)
referred to
Para 42
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
D
4280 of2007
From the Judgment and Order dated 30.10.2006 of the
High Court of Punjab and Haryana at Chandigarh in Writ
Petition No. 15029 of 2005
E
WITH
C.A. NOS. 4281, 4282 of2007
C. A. NO. 3031 of 2008
F
C. A. NO. 4379 of 2010
C. A. NOS. 908, 5448, 5449, 5452, 5453, 8685-8686 of
2011
C.A. N0.1979of2014
G
C.A. NOS. 13601, 13602, 13603, 13605, 13606, 13607,
13608, 13609, 13610, 13611, 13612, 13614, 13615, 13616,
13617, 13618, 13619, 13620, 13621, 13622, 13623, 13624,
13625, 13626-13627, 13628, 13629, 13630, 13631, 13632,
13633, 13634, 13635, 13636, 13637-13638, 13639, 13640,
H
340
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A 13641-13642, 13643, 13644, 13645, 13646, 13647, 13648,
13649, 13650, 13651, 13652, 13653, 13654, 13655, 13656,
13657, 13658, 13659, 13660, 13661, 13662, 13663, 13664,
13665, 13666, 13667, 13668, 13669, 13670, 13671, 13672,
13673, 13674 of2015
B
Guru Krishan Kumar, K. Radha Krishnan, Meenakshi
Arora, Balbir Singh, Ajay Aggarwal, Sikha Sandhu, Mallika
Joshi, Rajan Narain, Sudhir Malhotra, Poojan Malhotra,
Sanjeev Malhotra, Rameshwar Prasad Goyal, B. Krishna
C Prasad, Mohit D. Ram, B. V. Bairam Das, J. S. Sinha, Braj
Kishore Mishra, Aparna Jha, M. P. Sahay, Rupesh Kumar,
Harpreet Singh, Jitin Singhal, Pratik Raoka, Pravesh
Bahuguna, V. Lakshmikumaran, L. Charnaya, Hemant Bajaj,
Aditya Bhattacharya, Anandh K., M. P. Devanath, Arijit Prasad,
D T. M. Singh, R. S. Verma, Anil Katiyar, V. N. Koura, Paramjeet
Benipal, Sum it Singh Benipal, Avneesh Arputham, Anuradha
Arputham, Shobhit Nanda, Aruna Mathur, (for ArputhamAruna
& Co.), Venkita Subramoniam T. R., Himanshu Shekhar,AP &
J Chambers, George Thomas, Ejaz Maqbool, Garvesh Kabra,
E Rahul Narayan, Mohit Singh, Mahima, Rupinde~ S., Abhishek
S. Baghel, Rajesh Kumar, R. K. Srivastava, Krishna Kumar R.
S., K. K. L. Gautam, Rahul Nagpal forthe appearing parties.
F
The Judgment of the Court was delivered by
R.F. NARIMAN, J. 1. Leave granted.
2. This batch of appeals raises questions relating to the
demand for interest and penalty under Rules 9620, 96 ZP and
G 96 ZQ of the Central Excise Rules, 1994, which were framed
in order to effectuate the provisions contained in Section 3A
of the Central Excise Act, 1994. Several High Courts have
struck down the said Rules relating to penalty as being ultra
vires the parent provision and violative of Articles 14 and
H
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
341
OF CENTRAL EXCISE [R.F. NARIMAN, J.]
19(1)(g) of the Constitution. Most of the appeals in this batch A
are. therefore, by the Union of India. However, before dealing
with the said appeals, it is necessary to first semegate Civil
Appeal No.4280 of 2007 which raises a slightly different
question from the questions raised in the other appeals and
decide it first.
B
3 .. The question which arises for decision in the said
appeal is the demand, by means of a letter dated 19.8.2005,
for payment of interest for delayed payment of central excise
duty under Section 3Aofthe Central Excise Act, 1944.
C
4. The case of the appellant is that it took a rolling mill on
lease for the period from 1997 to 2000 and manufactured
rerolled non-alloyed steel products. On 1.9.1997 the
compounded levy scheme was introduced by way of insertion o
of Section 3A of the Central Excise Act. The appellant opted
for the aforesaid scheme under Rule 96ZP of the Central
Excise Rules. When the lease expired, the appellant
surrendered its registration certificate on 1.6.2000. As stated
hereinabove, on 19.8.2005 the impugned notice was issued E
to the appellant demanding interest for delayed payment of
· duty for the period 1997 to 2000.
5. The High Court framed two questions which arose for
its conf' ideration: ( 1) whether "omission" of the compounded
F
levy scheme in 2001 wipes out the liability of the assessee for
the period during which the scheme was in operation, and (2)
whether the letter of demand of interest for delayed payment
was liable to be set aside on the ground of delay.
6. The High Court found, after distinguishing some of the
judgments of this Court, and after relying upon Section 38A of
the Central Excise Act, which was added vide Section 131 of
the Finance Act, 2001, that on omission of Section 3A, the
G
liability of the assessee was not wiped out.
H
342
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A
7. Shri Ajay Aggarwal, learned counsel who appeared
on behalf of the appellant fairly submitted that a recent judgment
delivered by this Bench, namely, Mis Fibre Boards (P) Ltd.,
Bangalore v. Commissioner of lncom·e Tax, Bangalore,
[2015] 376 ITR 596 (SC), would cover the matter before us
B being directly against the appellant's case. However, he
submitted that for various reasons this judgment requires a
relock and ought to be referred to a larger Bench of three
Judges. Shri Aggarwal argued the matter with great ability and
we listened to him with considerable interest.
c
8. First, it may be stated that the judgment of this Court
in the Fibre Board's case has taken the view that an
"omission" would amount to a "repeal", after referring to several
authorities of this Court, G.P. Singh's Principles of Statutory
D Interpretation, Section 6A of the General Clauses Act, 1897,
and a passage in Halsbury's Laws of England. Ultimately, this
Court arrived at the conclusion that an "omission" would amount
to a "repeal" for the purpose of Section 24 of the General
Clauses Act. Since the same expression, namely, "repeal" is
E used both in Section 6 and Section 24 of the General Clauses
Act, the construction of the said expression in both sections
would, therefore, include within it "omissions" made by the
legislature.
F
9. Shri Aggarwal, however, argued that there is a
fundamental distinction between a "repeal" and an "omission"
in that in the case of a "repeal" the statute is obliterated from
the very beginning whereas in the case of an "omission" what
gets omitted is only from the date of "omission" and not before.
G This being the case, it is clear that things already done in the
case of an "omission" would be saved. However, a "repeal"
without a savings clause like Section 6 of the General Clauses
Act would not so save things already done· under the repealed
H statute. He further argued that Section 6A which was relied
SH REE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
343
OF CENTRAL EXCISE [R.F. NARIMAN, J.]
upon by the Bench in the Fibre Board's case did not state that A
an "omission" would be included within the expression "repeal",
but that if Section 6A were carefully read, an "omission" would
only be included in an "amendment" which, under the Section,
can be by way of omission, insertion or substitution. Therefore,
it is fallacious to state that Section 6A would lead to the B
conclusion that "omissions" are included in "repeals". He further
argued that in any event, the true ratio decidendi of the
Constitution Bench decision in Rayala Corporation (P) Ltd.
& Ors. v. Director of Enforcement, New Delhi, 1969 (2)
sec 412, is that an "omission" cannot amount to a "repeal" C
inasmuch as the first reason given for distinguishing the Madhya
Pradesh High Court's judgment in that case was that Section
6 cannot apply to the omission of a rule because an "omission"
is not a "repeal". He further argued that as the Madhya Pradesh 0
High Court's decision was put forward by the respondent in
that case in support of their argument, the Constitution Bench's
dealing with the said. decision in order to overcome it would
necessarily be the ratio decidendi of the said decision, and
being a Constitution Bench decision, would be binding upon E
this Bench. He further referred to Section 31 of the Prevention
of Corruption Act, 1988, which, in his opinion, makes it clear
that Parliament itself has understood that a repeal under
Section 6 of the General Clauses Act would not apply to
omissions. He has further argued that it may be true that the
F
expression "repeal" is normally used when an entire statute is
done away with, as opposed to an "omission" which is applied
only when part of the statute is deleted, but said that this is not
invariably the case, and referred to Section 1 of the Indian
ContractAct in which enactments mentioned in the schedule G
are repealed not in their entirety but only to the extent provided
and, therefore, argued that the expression "repeals" will apply
also to a part of an enactment as opposed to the enactment
as a whole.
H
344
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A
10. Shri Radhakrishnan, learned senior counsel
B
c
D
E
appearing on behalf of the revenue supported the judgment of
this Court in the Fibre Board's case and said that recent
judgments delivered which have clarified the law ought not to
be disturbed in the larger public interest.
11. Since Shri Aggarwal has made detailed submissions
on why according to him the judgment in the Fibre Board's
case is not correctly decided, we propose to deal with each of
those submissions in some detail.
12. First and foremost, it is important to refer to the
definition of "enactment" contained in Section 3(19) of the
General Clauses Act. The said definition clause states that
"enactment" shall mean the following:-
"enactment" shall include a Regulation (as hereinafter
defined) and any Regulation of the Bengal, Madras or
Bombay Code, and shall also include any provision
contained in any Act or in any such Regulation as
aforesaid."
13. From this it is clear that when Section 6 speaks of
the repeal of any enactment, it refers not merely to the
enactment as a whole but also to any provision contained in
any Act. Thus, it is clear that if a part of a statute is deleted,
F Section 6 would nonetheless apply. Secondly, it is clear, as
has bee·n stated by referring to a passage in Halsbury's Laws
of England in the Fibre Board's judgment, that the expression
"omission" is nothing but a particular form of words evincing
an intention to abrogate an enactment or portion thereof. This
G is made further clear by the Legal Thesaurus (Deluxe Edition)
by William C Burton, 1979 Edition. The expression "delete" is
defined by the Thesaurus as follows:
"Delete: - Blot out, cancel, censor, cross off, cross out,
H
cut, cut out, dele, discard, do away with, drop, edit out,
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
345
OF CENTRAL EXCISE [R.F. NARIMAN, J.]
efface, elide, eliminate, eradicate, erase, excise, expel, A
expunge, extirpate, get rid of, leave out, modify by
excisions, obliterate, omit, remove, rub out, rule out,
scratch out, strike off, take out, weed wipe out."
Likewise the expression "omit" is also defined by this B
Thesaurus as follows:-
"Omit-Abstain from inserting, bypass, cast aside, count
out, cut out, delete, discard, dodge, drop exclude,
exclude, fail to do, fail to include, fail to insert, fail to C
mention, leave out, leave undone, let go, let pass, let slip,
miss, neglect, omittere, pass over, praetermittere, skip,
slight, transire."
And the expression "repeal" is defined as follows:-
D
"Repeal:- Abolish, abrogare, abrogate, annul, avoid,
cancel, countermand, declare null and void, delete,
eliminate, formally withdraw, invalidate, make void,
negate, nullify, obliterate, officially withdraw, override,
overrule, quash, recall, render invalid, rescind,
E
rescindere, retract, reverse, revoke, set aside, vacate,
void, withdraw."
14. On a conjoint reading of the three expressions
"delete", "omit", and "repeal", it becomes clear that "delete" F
and "omit" are used interchangeably, so that when the
expression "repeal" refers to "delete" it would necessarily take
within its ken an omission as well. This being the case, we do
not find any substance in the argument that a "repeal" amounts
to an obliteration from the very beginning, whereas an G
"omission" is only in futuro. If the expression "delete" would
amount to a "repeal", which the appellant's counsel does not
deny, it is clear that a conjoint reading of Halsbury's Laws of
England and the Legal Thesaurus cited hereinabove both lead
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SUPREME COURT REPORTS
[2015] 12 S.C.R.
A to the same result, namely that an "omission" being tantamount
to a "deletion" is a form of repeal.
15. Learned counsel's second argument that Section 6A
when it speaks of an "omission" only speaks of an
B "amendment" which omits and, therefore does not refer to a
repeal is equally fallacious. In Bhagat Ram Sharma v. Union
of India, 1988 Supp SCC 30, this Court held that there is no
real distinction between a repeal and an amendment and that
"amendment" is in fact a wider term which includes deletion
C of a provision in an existing statute. In the said judgment, this
Court held:-
"17. It is a matter of legislative practice to provide while
enacting an amending law, that an existing provision shall
o
be deleted and a new provision substituted. Such deletion
has the effect of repeal of the existing provision. Such a
law may also provide for the introduction of a new
provision. There is no real distinction between 'repeal'
and an 'amendment'. In Sutherland's Statutory
E
Construction, 3rd Edn., Vol. 1 at p. 477, the learned author
makes the following statement of law:
The distinction between repeal and amendment as these
terms are .used by the Courts is arbitrary. Naturally the
F
use of these terms by the Court is based largely on how
the Legislature have developed and applied these terms
in labelling their enactments. When a section is being
added to an Act or a provision added to a section, the
Legislatures commonly entitled the Act as an
G
amendment. ... When a provision is withdrawn from a
section, the Legislatures call the Act an amendment
particularly when a provision is added to replace the one
withdrawn. However, when an entire Act or section is
abrogated and no new section is added to replace it,
H
Legislatures label the Act accomplishing this result a
SHREE BHAGWATI STEELROLLING MILLS v. CMMNR.
347
OF CENTRAL EXCISE [R.F. NARI MAN, J.]
repeal. Thus as used by the Legislatures, amendment A
and repeal may differ in kind - addition as opposed to
withdrawal or only in degree -abrogation of part of a
section as opposed to abrogation of a whole section or
Act; or more commonly, in both kind and degree -
addition of a provision to a section to replace a provision
B
being abrogated as opposed by abrogation of a whole
section of an Act. This arbitrary distinction has been
followed by the Courts, and they have developed
separate rules of construction for each. However, they
have recognised that frequently an Act purporting to be C
an amendment has the same qualitative effect as a
repeal - the abrogation of an existing statutory provision
-and have therefore applied the term "implied repeal' and
the rules of construction applicable to repeals to such
0
amendments.
18. Amendment is in fact. a wider term and it includes
abrogation or deletion of a provision in ·an existing
statute. If the amendment of an existing law is small, the
Act professes to amend; if it is extensive, it repeals a E
law and re-enacts it. An amendment of substantive law
is not retrospective unless expressly laid down or by
necessary' implication inferred." (at para 17 & 18)
16. It is clear, therefore, that when this Court referred to
F
Section 6A in Fibre Board's case and held that Section 6A
shows that a repeal can be by way of an express omission,
obviously what was meant was that an amendment which
repealed a provision could do so by way of an express
omission. This being the case, it is clear that Section 6A G
undisputedly leads to the conclusion that a repeal would include
a repeal by way of an express omission.
17. Learned counsel then argued that while distinguishing
the Madhya Pradesh High Court's judgment in Rayala H
348
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A Corporation, a Constitution Bench of this Court expressly held
as the first reason that Section 6 applies only to repeals and
not to omissions. The Fibre Board's judgment has clearly
held as follows:
B
c
D
E
F
"First aod foremost, it will be noticed that two reasons
were given in Rayala Corporation (P) Ltd. for
distinguishing the Madhya Pradesh High Court judgment.
Ordinarily, both reasons would form the ratio decidendi
for the said decision and both reasons wou!d be binding
upon us. But we find that once it is held that Section 6 of
the General Clauses Act would itself not apply to a rule
which is subordinate legislation as it applies only to a
Central Act or Regulation, it would be wholly unnecessary
to state that on a construction of the word "repeal" in
Section 6 of the General Clauses Act, "omissions" made
by the legislature would not be included. Assume, on the
other hand, that the Constitution Bench had given two
reaso~s for the non-applicability of Section 6 of the
General Clauses Act. In such a situation, obviously both
reasons would be ratio decidendi and would be binding
upon a subsequent bench. However, once it is found
that Section 6 itself would not apply, it would be wholly
~uperfluous to further state that on an interpretation of
the word "repeal", an "omission" would not be included.
We are, therefore, of the view that the second so-called
ratio of the Constitution Bench in Raya la Corporation
(P) Ltd. cannot be said to be a ratio decidendi at all and
is really in the nature of obiter dicta." (at para 27)
G
18. Merely because the Constitution Bench referred to a
repeal not amounting to an omission as the first reason given
for distinguishing the Madhya Pradesh High Court's judgment
. would not undo the effect of paragraph 27 of Fibre Board's
H case which, as has already been stated, clearly makes the
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
349
OF CENTRAL EXCISE [R.F. NARIMAN, J.]
distinction between Section 6 not applying at all and Section A
6 being construed in a particular manner. Obviously, if the
Section were not to apply at all, any construction of the Section
would necessarily be in the nature of obiter dicta.
19. We also find that Section 6 could not possibly apply B
to the facts in Rayala Corporation's case for yet another
reason. Clause 2 of the amendment rules which was referred
to in paragraph 14 of the judgment in Raya la Corporation
reads as follows:-
"ln the Defence of India Rules, 1962, rule 132A (relating C
to prohibition of dealings in foreign exchange) shall be
omitted except as respects things done or omitted to be
done under that rule."
20. A cursory reading of clause 2 shows that after omitting
D
Rule 132A of the Defence of India Rules, 1962, the provision
contains its own saving clause. This being the case, Section
6 can in any case have no application as Section 6 only applies
to a Central Act or regulation "unless a different intention
appears". A different intention clearly appear~ ona reading of E
clause 2 as only a very limited savings clause is incorporated
therein. In fact, this aspect is noticed by the Constitution Bench
in paragraph 18 of its judgment, in which the Constitution Bench
states:-
"As we have indicated earlier, the notification of the
Ministry of Home Affairs omitting Rule 132-Aofthe D.l.Rs.
did not make any such provision similar to that contained
in Section 6 of the General Clauses Act."
21. It was then urged before us that Section 31 of the
Prevention of Corruption Act, 1988 would also lead to the
conclusion that Parliament itself is cognizant of the fact that an
omission cannot amount to a repeal". Section 31 of the
F
G
Prevention of Corruption Act, 1988, states as follows:-
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350
SUPREME COURT REPORTS
[2015] 12 S.C.R.
A
"Section 31 - Omission of certain sections of Act 45 of
1860
Sections 161to165A (both inclusive) of the Indian Penal
Code, 1860 (45of1860) shall be omitted, and section 6
B
of the General Clauses Act, 1897 (10 of 1897), shall
apply to such omission as ifthe said sections had been
repealed by a Central Act."
22. It is settled law that Parliament is presumed to know
C the law when it enacts a particular piece of legislation. The
Prevention of Corruption Act was passed in the year 1988,
that is long after 1969 when the Constitution Bench decision
in Rayala Corporation had been delivered. It is, therefore,
presumed that P2rliament enacted Section 31 knowing that
o the decision in Raya la Corporation had stated that an omission
would not amount to a repeal and it is for this reason that
Section 31 was enacted. This again does not take us further
as this statement of the law in Raya la Corporation is no longer
the law declared by the Supreme Court after the decision in
E the Fibre Board's case. This reason therefore again cannot
avail the appellant.
23. The reference to the savings provision in Section 1
of the Indian Contract Act again does not take us very much
F further as the expression "repeal" as has been pointed out
above can be of part of an enactment also. This being the
case, when the legislature uses the word "omit" it usually does
so when it wishes to delete a particular section as opposed to
deleting an entire Act. As has been noticed both in Fibre
G Board's case and hereinabove, these are all expressions
which only go to form and not to substance. Even assuming
for the sake of argument that we were inclined to agree with
Shri Aggarwal. given the force of his inexorable logic, this Court
has laid down the parameters of when it would be expedient
H to have a relook at a particular decision in the case of Keshav
SHREE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
351
OF CENTRAL EXCISE [R.F. NARI MAN, J.]
Mills Co. Ltd. v. CIT, Bombay North, 1965 (2) SCR 908, as A
follows.-
"In dealing with the question as to whether the earlier
decisions of this Court in the New Jehangir Mills
[1959]371TR11 (SC) case and the Petlad Co. Ltd. [1963] B
·
S.C.R. 871 case should be reconsidered and revised
by us, we ought to be clear as to the approach which
should be adopted in such cases. Mr. Palkhivala has not
disputed the fact that, in proper case, this Court has
inherent jurisdiction to reconsi~er and revise its earlier C
decisions, and so, the abstract question as to whether
such a power vests in this Court or not need not detain
us. In exercising this inherent power, however, this would
naturally like to impose certain reasonable limitations and .
would be reluctant to entertain pleas for the D
reconsideration and revision of its earlier decisions,
unless it is satisfied that there are compelling and
substantial reasons to do so. It general judicial
experience that in matters of law involving question of
constructing statutory or constitutional provisions, two E
views are often reasonably possible and when judicial
approach has to make a choice between the two
reasonably possible views, the process of decisionmaking is often very difficult and delicate. When this Court F
hears appeals against decisions of the High Courts and
is required to consider the propriety or correctness of
the view taken by the High Courts on any point of law, it
would be open to this Court to hold that though the view
taken by the High Court is reasonably possible, the G
alternative view which is also reasonably possible is
better and should be preferred. In such a case, the choice
is between the view taken by the High Court whose
judgment is under appeal, and the alternative view which
appears to this Court to be more reasonable; and in
H
352
A
B
c
D
SUPREME COURT REPORTS
[2015] 12 S.C.R. .
accepting it own view in preference to that of the High
Court, this Court would be discharging its duty as Court
of Appeal. But different considerations must inevitably .
arise where a previous decision of this Court has taken
a particular view as to the construction of a statutory
provision as,"forinstance, section 66(4) of the Act. When
it is urged that the view already taken by this Court should
be reviewed and revised, it may not necessarily be an
adequate reason for such review and revision to hold
that though the earlier view is a reasonably possible view,
the alternative view which is pressed on the subsequent
occasion is more reasonable. In reviewing and revising
its earlier decision, this Court should ask itself whether
in interests of the public good or for any other valid and
compulsive reasons, it is necessary that the earlier
decision should be revised. When this Court decides
questions of law, its decisions are, under Article 141,
binding on all courts within the territory of India, and so, it
must be the constant endeavour and concern of this Court
E
to introduce and maintain an element of certainty and
continuity in the interpretation of law in the country.
Frequent exercise by this Court of its power to review its
earlier decisions on the ground that the view pressed
before it later appears to the Court to be more
F
reasonable, may incidentally tend to make law uncertain
and introduce confusion which must be consistently
avoided. That is not to say that if on a subsequent
occasion, the Court is satisfied that its earlier decision
was clearly erroneous, it should hesitate to correct the
G
error; but before a previous decision is pronounced to
be plainly erroneous, the Court must satisfied with a fair
amount of unanimity amongst its members that a revision
of the said view is fully justified. It is not possible or
desirable, and in any case it would be inexpedient to lay
H
down any principles which should govern the approach
SH REE BHAGWATI STEEL ROLLING MILLS v. CMMNR.
353
OF CENTRAL EXCISE [R.F. NARIMAN, J.]
of the Court in dealing with the question of reviewing and A
revising its earlier decisions. It would always depend
upon several relevant considerations:- What is the nature
of the infirmity or error on which a plea for review and
revision of the earlier view is based? On the earlier
occasion, did some patent aspects of the question remain
B
unnoticed, or was the attention of the Court not drawn to
any relevant and material statutory provision, or was any
previous decision of this Court bearing on the point not
noticed? Is the Court hearing such plea fairly unanimous
that there is such an error in the earlier view? What would C
be the impact of the error on the general administration
of law or on public good ? Has the earlier decision been
followed on subsequent occasions either by this Court
or by the High Courts? And, would the reversal of the 0
earlier decision lead to public inconvenience, hardship
or mischief? These and other relevant considerations
must be carefully borne in mind whenever this Court is
called upon to exercise its jurisdiction to review and
review and revise its earlier decisions." (at page 921E
922)
24. Fibre Board's case is a recent judgment which, as
has correctly been argued by Shri Radhakrishnan, learned
senior counsel on behalf of the revenue, clarifies the law in
F
holding that an omission would amount to a repeal. The
converse view of the law has led to an omitted provision being
treated as if it never existed, as Section 6 of the General
Clauses Act would not then apply to allow the previous
operation of the provision so omitted or anything duiy done or G
suffered thereunder. Nor may a legal proceeding in respect of
any right or liability be instituted, continued or enforced in
respect of rights and liabilities acquired or incurred under the
enactment so omitted.