JUDGMENT [ENTITY], J.
1. The petitioner-[ENTITY] is engaged in the business of manufacturing Portland Cement which was a controlled commodity at the relevant point of time. The dispute in the present petition is for the period from 1st October, 1975 to 22nd December, 1975 with regard to Excise duty on packing material, that is, gunny bags. It has challenged the order dated 18th October, 1978 passed by the Assistant Collector, Central Excise Department, Bhavnagar, under [SECTION] of the [ACT] (hereinafter referred to as 'the Rules') confirming the demand for recovering differential duty amounting to Rs. 15,02,721.90 ps. from the petitioner. It is also prayed that the decision of the Assistant Collector and/or the Superintendent of Central Excise and Customs, by which packing charges on cement have been included in the assessable value be set aside. Packing charges on cement have been included in the assessable value be set aside. Packing charges on cement have been included in the assessable value for the purpose of Excise duty on the basis of [SECTION] of the [ACT] (hereinafter referred to as 'the Act').
2. At the time of filing the petition, the only question which was raised was whether packing charges were required to be included in the assessable value for the purpose of Excise duty. On merits, the Division Bench rejected the contention that under [SECTION] of the Act for determining assessable value of the accessible goods the value of the gunny bags which are used as packing material was required to be excluded for various reasons. However, at the time of hearing of the petition, the learned Advocate for the petitioner filed [CASE NUMBER] for amending the petition by adding a ground that [SECTION] of the Rules was substituted with effect from [SECTION]th August, 1977 and as there is no saving clause the proceedings initiated under the [SECTION] would come to an end. In support of this contention, he relied upon the decisions of this Court in the case of [PRECEDENT] and in the case of Mahendra Mills Ltd. v. Union of India, 1988 (3[SECTION]) E.L.T. 5[SECTION]5. The Division Bench granted the amendment but has referred the matter to the larger Bench.
3. In the case of Amit Processors Pvt. Ltd. (supra), show cause notice dated 1st August, 1978 was issued under [SECTION] of the Rules and no action as per the said notice was taken upto the month of June 1984. The Assistant Collector of Central Excise had passed an order on 29th July, 1984 holding that the petitioners were liable to pay additional excise duty and confirmed the notice issued under [SECTION]. That order was challenged before this Court. The Court held that the actions as initiated by issuing a notice under [SECTION] when the Rule was in force, but that action was not concluded as per [SECTION] before the Rule was omitted. There is no saving clause in the notification by which [SECTION] was omitted. Relying upon the decision of the Supreme Court in the case of [PRECEDENT], the Court negatived the contention that the provisions of [SECTION] of the [ACT] will save the action of the Assistant Collector in spite of the omission of [SECTION].
4. The decision in the case of Amit Processors Pvt. Ltd. (supra) is followed by this Court in the case of Mahendra Mills Ltd. (supra). The Court held that the show cause notices issued under [SECTION] or [SECTION] could not have been legally processed further and could not have validly resulted in adjudication after 17th November, 1980. The Court further held that as there was no saving clause, the proceedings, pending as on 17th November, 1980 under [SECTION] automatically lapsed. For this purpose, the Court relied upon the decision of the Supreme Court in the case of Rayala Corpn. Pvt. Ltd. (supra).
5. The decisions in the case of Amit Processors & Mahendra Mills (supra) were considered by the Division bench of this Court in the case of [PRECEDENT]. The Court gave various reasons for disagreeing with the ratio laid down in the aforesaid two decisions; but as the point was not pressed by the learned Advocate for the petitioners, the matter was not referred to the larger Bench.
[SECTION]. In the present case at the time of hearing of the matter, by filing an amendment application, the learned Advocate for the petitioner has raised the same contention that, in view of deletion of [SECTION] with effect from [SECTION]th August, 1977, the proceedings initiated under [SECTION] would come to an end and, therefore, the order passed by the Assistant Collector is illegal and void. The Division bench referred the matter to the larger Bench for considering the question whether the notices issued or actions taken under substituted [SECTION] and [SECTION] or [SECTION] of the Rules would stand discharged or terminated upon 'substitution' or 'omission' of Rule, as the case may be.
7. In the referring judgment [1991 (55) E.L.T. 4[SECTION]7], broadly the following reasons are given for arriving at the conclusion that the proceedings initiated under substituted [SECTION] and [SECTION] or [SECTION] of the Rules would continue even after substitution or omission.
(1) The two cases, namely, Amit Processors Pvt. Ltd. & Mahendra Mills Ltd. (supra), are decided on the basis of the Supreme Court judgment in the case of Rayala Corporation Pvt. Ltd. wherein the Supreme Court was only required to deal with the effect of repeal of statute, i.e., the [ACT], 19[SECTION]2 which were in force for temporary period. That decision would have no bearing because -
(a) [SECTION] and [SECTION] or [SECTION] for the aforesaid two Rules after [SECTION]-8-1977 are of permanent nature. It cannot be said by any stretch of imagination that they are part of temporary statute. (Reliance is placed on R. C. Jall v. Union of India, AIR 19[SECTION]2 SC 1281.)
(b) There is no question of repeal because [SECTION], [SECTION] and [SECTION] were substituted by Notification dated [SECTION]-8-1977 by [SECTION]. Clause 4 of the said Notification specially states that for [SECTION], [SECTION] and [SECTION] of the said Rules, the following [SECTION] shall be substituted. Thereafter [SECTION] is omitted because of the introduction of [SECTION] in the [ACT] with effect from 17-[SECTION]-1980 by Notification dated 12-[SECTION]-1980.
(c) Even in the case of Rayala Corporation Pvt. Ltd. (supra), it is not held that the proceedings which are initiated would come to an end as soon as rules are repealed. This would be clear from the following observations : "The argument of Mr. [ENTITY] was that, even if there was a contravention of [SECTION] by the accused when that rule was in force, the act of contravention cannot be held to be a 'thing done or omitted to be done under that rule', so that, after that rule has been omitted, no prosecution in respect of that contravention can be instituted. He conceded the possibility that, if a prosecution had already been started while [SECTION] was in force, that prosecution might have been competently continued. Once the rule was omitted altogether, no new proceedings by way or prosecution could be initiated even though it might be in respect of in offence committed earlier during the period that rule was in force. We are inclined to agree with the submission of Mr. [ENTITY] that the language contained in Clause 2 of the Defence of India (Amendment) Rules, 19[SECTION]3 can only afford protection to action already taken while the rule was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist".
(d) Even with regard to the temporary statute, rights and liabilities created under the repealed statute are not ipso facto terminated. The accrued rights and liabilities are saved unless they are expressly extinguished or the [ACT] specifically provides to the effect. Liability to pay duty of excise arises immediately when excisable goods are manufactured or produced (Reliance is placed on Indira Sohanlal v. Custodian of E.P., AIR 195[SECTION] SC 7[SECTION]; Jayantilal v. Union of India, AIR 1971 SC [SECTION]93; Joint Secretary Union of India v. [ENTITY], AIR 1975 SC 2275; [PRECEDENT]; [PRECEDENT]; Bansidhar v. State of Rajasthan, AIR 1989 SC 1[SECTION]14).
(2) [SECTION] and [SECTION] or [SECTION] were statutory rules and were for all the purposes law or part and parcel of the statute. (Reliance is placed on [PRECEDENT]; State of Uttar Pradesh & Ors. v. Babu Ram Upadhya, AIR 19[SECTION]1 SC 751.)
8. We may mention at this stage that besides the learned Advocate for the petitioner, learned Advocate Mr. [ENTITY] appears as an Intervenor. On behalf of the petitioner, it was vehemently contended by the learned Advocate that as [SECTION] of the Rules was substituted with effect from [SECTION]th August, 1977 and, as there is no saving clause, proceedings initiated under the old [SECTION] would come to an end and, therefore, the orders of adjudication made by the concerned Authorities on the basis of show cause notices issued under erstwhile [SECTION] or [SECTION] were rendered incompetent and illegal. To substantiate the said contention the learned Counsel placed reliance on the judgments rendered by this Court in the cases of Amit Processors Pvt. Ltd. and Mahendra Mills Ltd. (supra). As against this, Mr. [ENTITY], learned Sr. Standing Counsel for the union of India, advanced two-fold submission. The Substitution of the entire [SECTION] and [SECTION] by new [SECTION] is in effect and substance an amendment carried out in the various clause of [SECTION] and [SECTION] The substitution made by 1977 Notification could have been effectively achieved even by making substitution of certain works and phrases in the respective clauses. Therefore, the use of the term 'substitution' does not mean that the old Rules are repealed and new Rules are made in their place. Accordingly, the situation sought to be conveyed by the term 'substitution' used in the amending Notification dated 8th August, 1977 does not tantamount to repeal or omission as such. In the submission of Mr. [ENTITY], the notices issued under [SECTION] or [SECTION] do not lapse or abate on account of substitution of these Rules by new [SECTION] and [SECTION]. It is submitted that the new Rules are substantially continuation of the old Rules. He further submitted that, if the case on hand is a case of repeal, even the rights accrued to the parties prior to the repeal continue to be available even after the repeal unless a contrary intention is manifested by the amending provisions and, therefore, it is not necessary to invoke [SECTION] of the [ACT]. He submitted that crystallized rights and liabilities continue uniterrupted by intervening amendments.
9. At this stage, it would be appropriate to take a note of certain provisions of the Act as well as the Rules. [SECTION] of the Act provides that duties of excise shall be levied and collected in such a manner as may be prescribed. [SECTION] of the Act deals with valuation of excisable goods for purposes of charging of duty of excise. [SECTION] provides for obtaining licence to produce or manufacture any specified goods included in the Schedule to the [ACT]. [SECTION] of the Act makes provision for terms and conditions of licence which the Central Excise authority will issue under [SECTION] of the Act and the Rules framed thereunder. [SECTION] of the Act empowers the Central Government to make Rules to carry into effect the purpose of the Act. [SECTION] inter alia provides for making rules for ascertaining equivalent of normal price for providing for assessment and collection of duties of excise or remission go duty of excise, for transit of excisable goods or for removal of excisable goods or for regulating the production or manufacture, or any process of the production or manufacture, the possession, the storage and sale of salt and such other things. [SECTION] of the Act also empowers the rule making authority to provide for penalty in cases where no other penalty is provided under the Act. [SECTION] of the Act also provides for making rules to provide for imposing penalty as stated therein. Under [SECTION] all rules made and notifications issued under this Act are to be published in the Official Gazette. Every rule made under the Act is required to be laid before each House of the Parliament. Hence, [ACT] are framed in exercise of powers conferred by [SECTION], [SECTION] and [SECTION] of the Act. For carrying our the aforesaid purposes, the rules are framed which inter alia provide for assessment and collection of duties of excise and the manner of collection of duties of excise, its refund, procedure for removal of excisable goods, licence and the power of the concerned officer. These rules are part and parcel of the statute and the Act and the Rules are of Permanent nature.
10. In the present petition, we are concerned with the rules which prescribe procedure for recovery of duty of excise not levied or short levied or not paid or not paid in full or erroneously refunded. [SECTION], [SECTION] and [SECTION] as they stood immediately before coming into force of the Notification No. 2[SECTION]7, dated [SECTION]-8-1977 read as under :
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[SECTION]. On [SECTION]th August, 1977, the Government of India, Ministry of Finance (Department of Revenue) vide its Notification No. 2[SECTION]7 of 1977 substituted [SECTION], [SECTION] and [SECTION] which reads as under :
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12. On [SECTION]-[SECTION]-1978 by [ACT] an Act called 'The [ACT], was enacted by the Parliament.
13. [SECTION] of the [ACT] provides insertion of new [SECTION], [SECTION] and [SECTION] which inter alia deal with Recovery of Duties not levied or not paid or short-levied or short or erroneously refunded.
14. The Government of India vide its Notification No. 17[SECTION]/80-C.E., dated 12-[SECTION]-1980 appointed 17th November, 1980 as the date of coming into force of the said [ACT]. [SECTION] of the said Act reads as under :
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15. It may be noted here that on the same day, i.e. on 17-[SECTION]-1980 the introduction to [SECTION] of the Act, [SECTION] which was in existence was omitted vide Government of India's Notification No. 177/80-C.E., dated 12-[SECTION]-1980.
Clause 2 of the said notification which is relevant for our purpose reads as under :
2. In the [ACT] (herein after referred to as the said Rules) [SECTION], [SECTION] and [SECTION] shall be omitted.
From the aforesaid Rule, it is clear that :
(1) While substituting [SECTION], [SECTION] and [SECTION] by Notification dated [SECTION]th August, 1977, there was no intention on the part of the legislature to take away the power of the authority to recover duties or charges short-levied or not paid or not paid in full or erroneously refunded. By sub-stitution of [SECTION], [SECTION] and [SECTION], there is no material Change with regard to power of the authority to recover duties short-levied or not paid or not paid in full or erroneously refunded. The same power continues with some amendment in the wordings. The only material change is with regard to time-limit. Under [SECTION] and [SECTION], the time-limit prescribed is three months while [SECTION] provides period of six months and proviso to that Rule provides the period of five years in the cases where duty has been short-levied or has not been paid in full by reasons of fraud, collusion, any wilful mis-statement or suppression of facts.
(2) Again on 17th November, 1980 [SECTION] was omitted and on the same day [SECTION] was added in the [ACT] by [ACT]. [SECTION] of the Act is virtually similar to [SECTION]. It is, therefore, apparent that the power of the Customs Department to recover duties short-levied or not paid in full or erroneously refunded remains as it was, except with regard to change in time-limit and some other change which has no material bearing on the power of the authority to recover the duty of excise.
(3) The authority to issue show cause notice remains with the proper officer; the authority to determine whether any amount is to be recovered and, if so, the power of quantification and assessment of the amount, remains with the Assistant Collector all throughout.
1[SECTION]. Keeping the aforesaid provisions of the Act and the Rules made thereunder, in mind, we would now consider the ratio laid down in the case of Amit Processors Pvt. Ltd. (supra) 1985 (21) E.L.T. 24. In that case, the Division Bench of this Court (Coram : [ENTITY] & [ENTITY], JJ.) held that show cause notice under [SECTION] of the Rules was issued on 1-8-1978 and the Assistant Collector passed the order on 29-[SECTION]-1984. Prior to that [SECTION] has been omitted on 17-8-1980. The Court relied upon the judgment of the Supreme Court in the case of M/s. Rayala Corporation (P) Ltd. (supra) and held as under :
"When [SECTION] of the [ACT] cannot be pressed into service and when there is no saving clause in the notification by which [SECTION] was omitted, it is clear that no action could have been taken in pursuance of the said notice which was issued under [SECTION] as it then existed."
The aforesaid decision is relied upon by the Division Bench of this Court (Coram : [ENTITY] & [ENTITY], JJ.) in the case of Mahendra Mills Ltd. (supra) 1988 (3[SECTION]) E.L.T. 5[SECTION]3. The Court held that that the show cause notice issued under [SECTION] or [SECTION] could have been legally processed further and could not have validly resulted in adjudication after 17-[SECTION]-1980 as on that date new [SECTION] itself was omitted from the Rules even though with effect from that date [SECTION] was added in the Act. The Court observed that there was no saving clause. Therefore, pending proceedings under [SECTION] would automatically lapse from 17-[SECTION]-1980. There also the Court relied upon the decision of the Supreme Court in the case of M/s. Rayala Corporation Pvt. Limited (supra), and held that [SECTION] of the [ACT] cannot apply to the case of omission of rules and as there was no saving clause in respect of [SECTION] or [SECTION], the authorities were not competent to adjudicate upon the show cause notice issued under [SECTION] prior to [SECTION]-8-1977. The relevant discussion of the Court is as under [CASE NUMBER] :
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17. In our view, the aforesaid two decisions are solely based on the decision of the Supreme Court in the case of M/s. Rayala Corporation Pvt. Ltd. (supra). With profound respect it should be noted that the Court has not considered the vital aspects that -
(i) neither the [ACT] nor the Rules made thereunder are temporary or for a limited period;
(ii) the taxable event for the duty of excise is manufacture or production of the goods within the country as provided in [SECTION] of the Act. With regard to levy of duty of excise, there is no change by substitution or deletion of the rules. The liability to pay the duty of excise remains as it was.
(iii) the [ACT] framed under the provision of the [ACT] are statutory rules. They are law for all purposes and are part and parcel of the statute itself;
(iv) even with regard to temporary statute or rules, rights and liabilities accrued under the repealed statute are not ipso facto terminated. Rights and liabilities are saved unless they are expressly extinguished or an amending Act specifically provides to that effect.
(v) even with regard to substitution or omission or amending of an Act for ascertaining whether the rights and liabilities under the repealed Act have been put an end to by the Act, the line of enquiry would not be whether the new Act expressly keeps alive old rights and liabilities under the repealed Act but whether it manifests an intention to destroy them. Secondly, another line of approach may be to see as to how far the new Act is retrospective in operation.
18. The first proposition that the [ACT] and the Rules made thereunder are not temporary requires no further discussion.
19. In our view, the material aspect which is not considered is that the taxable event for the duty of excise is manufacture or production of the goods within the country. Charging [SECTION] of the Act, inter alia, provides that there shall be levied duties of excise on all excisable on all excisable goods which are produced or manufactured in India at the rates set forth in the Schedule to the [ACT]. Prior to 28th February, 198[SECTION], it was at the rates set forth in the First Schedule to the Act. [SECTION] further provides that duties of excise on all excisable goods shall be collected in such manner as may be prescribed. The [ACT], inter alia prescribe the procedure for collection of duty of excise. BY substitution of rules or by amendment in procedure for collection of duty of excise, it would not mean that liability to pay duty of excise ceases or is wiped out. At the most the question which may arise for consideration would be whether the amended or the unamended procedure is required to followed. But it cannot be said that by substitution of [SECTION], [SECTION] and [SECTION] or by omission or [SECTION] or by incorporating [SECTION] of the Act, the manufacturer or producer will not be required to pay duty of excise for the foods which are manufactured and are removed from the factory premises. The method of collection does not affect the essence of duty but only relates to the machinery of collection for administrative convenience. In the case of Union of India v. Bombay Tyre International Ltd., 1983 (14) E.L.T. 189[SECTION], the Supreme Court relied upon the decision in the case of R. C. Jall v. Union of India, AIR 19[SECTION]2 SC 1281 and observed that the incidences of taxation should not be confused with the machinery provided for collection thereof. The stage of collection need not in point of time synchronize with the completion of the manufacturing process. The Court pertinently observed that while the levy in our country has the status of a constitutional concept, the point of collection is located where the statute declares it will be. The relevant observations are as under :
"This Court had occasion to consider a similar question in R. C. Jall v. Union of India, 19[SECTION]2 Supple. (3) [SECTION]. In that case, the Central Government was authorised by an ordinance to levy and collect as a cess on coal coke and coke despatched from collieries in British India a duty of excise at a specified rate. [SECTION] made under the Ordinance empowered the Government to impose a duty of excise on coal and coke when such coal and coke was despatched by rail from the collieries of the coke plants, and the duty was to be collected by the Railway Administration by means of a surcharge on freight either from the consignor or consignee. It was contended by the assessee that the excise duty could not legally be levied on the consignee who had nothing to do with the manufacture or production of coal. The Court remarked : 'The argument confuses the incidence of taxation with the machinery provided for the Collection thereof' and reference was made to In re : The [ACT] (supra). The [PRECEDENT] (supra) and Governor-General in [PRECEDENT] (supra). This Court then summarised the law as follows :
'Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience'.
Other cases followed where the nature of excise duty was reaffirmed in the terms set out earlier, and reference may be made to In re : The Bill to amend [SECTION] of the [ACT] and [SECTION] of the Central Excises and salt Act, 1944, 19[SECTION]4 (3) SCR 787, Union of India v. Delhi Cloth & General Mills, 19[SECTION]3 Suppl. (1) SCR 58[SECTION] = 1978 (2) E.L.T. (J 199), M/s. Guruswamy & Co. v. State of Mysore & Ors., 19[SECTION]7 (1) SCR 548, and South Bihar Sugar Mills Ltd. v. Union of India & Ors., 19[SECTION]8 (3) Scr 21.
We think we have shown sufficiently that while the levy is on the manufacture or production of goods, the stage of collection need not in point of time synchronize with the completion of the manufacturing process. While the levy in our country has the status of a constitutional concept, the point of collection is located where the statute declares it will be."
20 Considering the aforesaid aspect of the matter, it is clear that change in the method of collection of duty of excise which was not levied or not paid or no paid in full or short-levied or erroneously refunded would have no bearing on the liability to pay the duty of excise. It would no mean that because there is change in the machinery of collection of duty of excise, the liability to pay the duty of excise which is crystallised on the date of production or manufacture of the goods is in any way wiped out. The decision in the case of Rayala Corporation (supra) which is the basis of the decisions in the case of Amit Processors Pvt. Ltd. (supra) and Mahendra Mills Ltd. (supra) dealt with the question whether a person can be prosecuted for the act committed by him when the [ACT], 19[SECTION]2 were in force after omission of [SECTION] relating to prohibition of dealings in foreign exchange. The Court held that the act of contravention cannot be held to be a 'thing done or omitted to be done under the rule', as prescribed in saving clause (2) of Amendment Rules, as that after that rule has been omitted, prosecution in respect of that contravention cannot be instituted. This decision would have no bearing in the present case because there is no deletion or omission in [SECTION] of the Act with regard to liability to pay duty of excise. The substitution or omission is only in the procedure prescribed for recovery of duty of excise not levied or not paid or short-levied or not paid in full or erroneously refunded. Therefore, it cannot be held that the proceedings for recovery of duty of excise require to be dropped or stand lapsed.
21. For the third proposition that the Act and the Rules are statutory rules and they are law for all purposes and are part and parcel of the statute itself, reliance can be placed on the decision in the case of [PRECEDENT], wherein the Court considered the provisions of [SECTION] of the [ACT] which were framed under [SECTION] of the [ACT] and held that the Rules are part and parcel of the statute itself.
Further, the case of State of U.P. v. Babu Ram AIR 19[SECTION]1 SC 751, the Court relied upon the following passage from [ENTITY] "On the Interpretation of Statutes", 10th Edn. pp. 50-51.
"Rules made under a statute must be treated for all purpose of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially noticed for all purpose of construction or obligation."
After appreciating the various contentions raised by the parties, the Court observed as under :
"There decisions and the observations made therein could not be understood to mark a radical departure from the fundamental principle of construction that rules made under a statute must be treated as exactly as if they were in the Act and are of the same effect as if contained in the Act."
Further in the case of Chief Inspector of Mines v. K. C. Thaper, AIR 19[SECTION]1 SC 838, while dealing with the similar contention the Court has observed that the Rules and Regulations have the same effect as if they are contained in the Act. For the purpose of construction they are to be treated as if contained in the Act. The relevant observation in paragraph 20 is as under :
"The true position appears to be that the Rules and Regulations do not lose their character as Rules and Regulations, even though they are to be of the same effect as if contained in the Act. They continue to be rules subordinate to the Act, and though for certain purposes, including the purpose of construction, they are to be treated as if contained in the Act, their true nature as subordinate rules is not lost. Therefore, with regard to the effect of a repeal of the Act, they continue to be subject of the operation of [SECTION] of the [ACT]."
22. Further in case of Joint Secy, Govt. of India v. [ENTITY], AIR 1975 SC 2275, the Court dealt with the rules framed under the [ACT]. The Court considered the effect of deletion of [SECTION] from 30th August, 19[SECTION]2. [SECTION] prescribed that where the property is in the occupation of more persons than one, it shall be offered to the person whose gross compensation is the highest. The Court held that the said Rule deals with a substantive right conferred by the Act on displaced persons. The Court therefore, negatived the contention that the pending proceedings are required to be dealt with by the amended Rules. The Court also approved the Full Bench decision of the Punjab and Haryana High Court in the case of [ENTITY] v. Union of India, AIR 1974 Punj. & Har. [SECTION]5. The relevant observations of the Supreme Court are as under :
"[SECTION] prescribes that where the property is in the occupation of more persons than one, it shall be offered to the person whose gross compensation is the highest. Clearly [SECTION] deals not with the form of procedure, but with a substantive right conferred by the Act on displaced person. Mr. [ENTITY] described this Rule as only a mode or manner of payment of compensation. This many be so, but the form and manner in which compensation is payable is also part of the right to get compensation. [SECTION] is not an instrument or machinery for asserting the right conferred by the Act; it does not regulate the procedure for settlement of disputes concerning that right. Therefore, the deletion of the Rule in 19[SECTION]3 cannot affect pending actions. The rights of [ENTITY] and [ENTITY] be governed by [SECTION] which was in force in 1959 when the dispute arose and was decided by the Managing Officer. A Full Bench of the Punjab and Haryana High Court in Dev Raj v. Union of India, AIR 1974 Punjab & Haryana [SECTION]5 considering the same question which arises for determination in this appeal, held that 'a displaced person has a right to the determination of his claim for compensation and its satisfaction in the prescribed manner and this is a substantive right, that so far as [SECTION] is concerned the right which a displaced person claims under this Rule cannot be adversely affected or taken away unless it is expressly stated in the amending provision, or the language of the Act unmistakably and unequivocally indicates an intention to that effect.' This, in our opinion, is a correct statement of the law."
In the case of [ENTITY] (supra), the Court relied upon the unreported decision of Supreme Court in Civil Appeal No. 2145 of 19[SECTION][SECTION] decided on 3-2-19[SECTION]7 and held that amendment in statutory rules which are not expressly made [with] retrospective effect cannot be so considered as to affect the right of the claimant who has exercised his right by filing an application under the Rules.
23. Further, in the case of [PRECEDENT], the Supreme Court considered the concept of words 'repeal' and 'substitution' and relied upon the interpretation in [ENTITY]'s Statutory Construction, 3rd Edn., Vol. 1 at p. 477. The relevant discussion in paragraphs 17 and 18 is as under :
"17. It is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and new provision substituted. Such deletion has the effect of repeal of the existing provisions. Such a law may also provide for the introduction of a new provision. There is no real distinction between 'repeal' and an 'amendment'. In [ENTITY]'s Statutory 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 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 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, Legislatures label that Act accomplishing this result a repeal. Thus as used by the Legislature, amendment 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 of Act; or more commonly, in both kind and degree - addition of a provision to a section to replace a provision being abrogated as opposed by abrogation of a whole section of an Act. This arbitrary distinction has been followed by the Court and they have developed separate rules of construction for each. However, they have recognised that frequently an Act purporting to be an amendment has the same qualitative effect as 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 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 law and re-enacts it. An amendment of substantive law is not retrospective unless expressly laid down or by necessary implication inferred."
24. It should be noted that in the same volume of [ENTITY] Statutory Construction at page 425, the learned author observed as under :
"Provisions of the original Act or section which are repeated in the body of the amendment, either in the same or equivalent words, are considered a continuation of the original law. This rule of interpretation is applicable even though the original act or section is expressly declared to be repealed. In some States this rule of interpretation has been enacted into law. The provisions of the original Act or section re-enacted by the amendment are held to have been the law since they were first enacted, and the provisions introduced by the amendment are considered to have been enacted at the time of the amendment tool effect. Thus, rights and liabilities accrued under the provisions of the original Act which are re-enacted are not affected by the amendment."
The learned author has further observed in [SECTION] :
"This fact of amendment by itself does not indicate whether the change is of substance and form. Amendment omitting provision as to power of Board did not affect power of Board because another provision in same section granting substantially the same power was re-enacted and the section as amended should be given the same meaning as if it has been so enacted originally. See lowa State Board of Assessment and Review 225 lowa 855, 283 and W. 87 (1938)."
25. In the present case, considering the legislative development, it is abundantly clear that there is amendment of the existing rules by substituting it or by omitting and re-enacting it. It would be only an amendment and not abrogation or repeal of the rules as a whole. The rules are added to replace the one withdrawn. Further, the provisions of original [SECTION], [SECTION] and [SECTION] are repeated by substituting [SECTION] in the same or equivalent words. Some is the position with regard to [SECTION]. [SECTION] is omitted by incorporating [SECTION] in the Act in similar wording. Therefore, applying the aforesaid principles of Statutory Construction, it would be clear that the provisions of original [SECTION], [SECTION] and [SECTION] which are omitted by [SECTION] which prescribes similar procedure, are to be considered as continuation of the original Rules. Further, after omission of [SECTION] by enacting [SECTION], the legislature has continued the provisions of the original rule with the some modification. The provisions of the original rules or the re-enacted rules by substitution or omission of the rules are required to be held to be the law since they were first enacted and the provisions introduced by the amendment would have the same effect from the time when the amendment took effect. From the discussion of the aforecited judgments, it would be clear that for the purpose of construction or obligation the rules made under a statute must be treated as if they were part and parcel of the Act. By substitution or omission of rules, crystallised rights are not at all adversely affected. There is no provision in the re-enacted [SECTION] or [SECTION] adversely affecting or taking away the right of the department to recover the duty of excise. The rights and liabilities accrued under the provisions of the original [SECTION], [SECTION] and [SECTION] or re-enacted [SECTION] or [SECTION] are not affected by substitution or omission.
2[SECTION]. The fourth and fifth propositions are required to be dealt with together. The rights and liabilities accrued under the repealed statute, even if it is temporary, are not ipso facto terminated. Further, the line of enquiry would not be whether the new Act expressly keeps alive old rights and liabilities under the repealed Act but whether it manifests an intention to destroy them. Another line of approach may be to see as to how far the new Act is retrospective in operation. With regard to liability for payment of duty of excise, it arises under the Act as soon as the goods are manufactured or produced. May be that it is recovered as per the rules as soon as the goods are removed from the factory premises. That means, the liability to pay duty of excise is crystallised as soon as the goods are manufactured or produced. In case of disputes with regard to quantification after adjudication of the contentions raised by the parties, there may be reduction or increase in the amount. But liability to pay duty of excise is a perfected debt on the day when the goods are manufactured or produced. Change in procedure for recovery would not mean that liability to pay duty of excise ceases.
27. While dealing with the similar contention as to when income-tax liability becomes crystallised in the case of [PRECEDENT], the Court held that :
"An income-tax liability becomes crystallised on the last day of the previous year corresponding to the particular assessment year, and a wealth-tax liability becomes crystallised on the valuation date corresponding to the particular assessment year. In each case the liabilities are perfected debts on the last day of the previous year or the valuation date, as the case may be. Likewise, a gift-tax liability becomes crystallised, and therefore a perfected debt, on the last day of the previous year relevant to the particular assessment year. AIR 19[SECTION][SECTION] SC 1[SECTION]0, (19[SECTION]8) [SECTION]9 ITR 8[SECTION]4 (SC) and 1983 Tax. LR 1[SECTION]03 (SC) foll."
28. In the case of [PRECEDENT], the Court took the similar view. The Court observed that the right given to the assessee for the assessment year 19[SECTION]1-[SECTION]2 under [SECTION] of 1922 Act was an accrued right and a vested right. It could have been taken away expressly or by necessary implication. It has not been so done. No contrary intention is expressed by the legislature by enacting an Act. Therefore, the said right continues. The Court further observed that whatever rights are expressly saved by the 'savings' provision stand saved. But, that does not mean that rights which are not saved by the 'savings' provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted. Rights which have accrued are saved unless they [are] taken away expressly. The right to carry forward losses which had accrued under the repealed [ACT] is not saved expressly by [SECTION] of the Income-tax Act, 19[SECTION]1. But it is not necessary to save a right expressly in order to keep it alive after the repeal of the old Act of 1922. [SECTION] of the [ACT] saves accrued rights unless they are taken away by the repealing statute.
29. Further dealing with the similar contention in the case of Bansidhar v. State of Rajasthan, AIR 1989 SC 1[SECTION]14, the Court dealt with the contention whether on repeal of [ACT] by the Rajasthan Imposition of Ceiling of Agricultural Holdings Act ([SECTION] of 1973), crystallised rights were affected. The Court negatived it by holding that the right of the State to take over excess land vested in it as on the appointed day and only the quantification remained to be worked out. The Court thereafter referred to the following passage by Lord [ENTITY], in Director of Public Works v. Ho Po Sand, 19[SECTION]1 (2) All ER 721 :
"It may be, therefore, that under some repealed enactment, a right has been given, but that, in respect of it, some investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should be or should not be given. On a repeal the former is preserved by the [ACT]. The latter is not."
The Court thereafter held that the right of the State to the excess land was not merely an inchoate right under the Act but a right 'accrued' and the liability of the land owner to surrender the excess land as on 1-4-19[SECTION][SECTION] was a liability 'incurred'.
30. The same view is reiterated in the case of Vinod Gurudas Raikar v. National Insurance Co. Ltd., AIR 1991 SC 215[SECTION]. The Court observed as under :
"[SECTION]. Even independent of the [ACT], it is firmly established that unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the other hand, a law which is procedural in nature, and does not affect the rights, has to be held to be retrospectively applicable. The question is whether the appellant has been deprived of an accrued right or privilege in the present case."
31. Further, in the case of [PRECEDENT], the Court held that it would be unsafe to lay down any inflexible rule with regard to effect of an expiration of a temporary Act. The Court held that if the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired. The relevant observation in paragraph 12 is as under :
"In considering the effect of an expiration of a temporary Act, it would be unsafe to lay down any inflexible rule. It certainly requires very clear and unmistakable language in a subsequent Act of the legislature to revive or re-create an expired right. If, however, the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired. In order to ascertain whether the rights and liabilities under the repealed Ordinance have been put an end to by the Act, 'the line of enquiry would be not whether', in the words of [ENTITY], J. in [PRECEDENT], 'the new Act expressly keeps alive old rights and liabilities under the repealed Ordinance but whether it manifests an intention to destroy them'. Another line of approach may be to see as to how far new Act is retrospective in operation."
32. In the case of [PRECEDENT], the Court dealt with the provisions of [SECTION] of the [ACT] and held that [SECTION] cannot be read as obliterating the entire operation of the inconsistent laws, or to wipe them out altogether from the Statute Book, for to do so will be to give them retrospective effect which they do not possess. The Court pertinently observed that such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the [ACT]. Thereafter, the Court dealt with the question as to whether there may be saving clause or not and held that unless the statute [has] retrospective effect insofar as the past acts are concerned, the law exists. The relevant observation is as under :
"Learned Counsel for the Applt. has drawn our attention to [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] were express provision has been made for saving things done under the laws which expired. It will be noticed that each of those Articles was concerned with expiry of temporary Statutes. It is well known that on the expiry of a temporary statute no further proceedings can be taken, unless the Statute itself saved pending proceedings. If, therefore, an offence had been committed under a temporary Statute and the proceedings were initiated but the offender had not been prosecuted and punished before the expiry of the Statute, then, in the absence of any saving clause, the pending prosecution could not be proceeded with after the expiry of the statute by efflux of time. If was on this principle that express provision was made in the several Articles noted above for savings things done or omitted to be done under the expiring laws referred to therein. As explained above, [SECTION] is entirely prospective in its operation in its operation and as it was not intended to have any retrospective effect there was no necessity at all for inserting in that Article any such saving clause. The effect of [SECTION] is quite different from the effect of the expiry of a temporary Statute or the repeal of a statute by a subsequent Statute. As already explained, [SECTION] only has the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise of fundamental rights on and after the date of the commencement of the [ACT]. It has no retrospective effect and if, therefore, an act was done before the commencement of the [ACT] in contravention of the provisions of any law which, after the [ACT], becomes void with respect of the excise of any of the fundamental rights, the inconsistent law is not wiped out so far as the past act is concerned, for to say that it is, will be to give the law retrospective effect. There is no fundamental right that a person shall not be prosecuted and published for an offence committed before the [ACT] came into force. So far as the past acts are concerned, the law exists notwithstanding that it does not exist with respect to the future exercise of fundamental rights."
33. Further, even in the case of M/s. Rayala Corporation (supra), [PRECEDENT], the Supreme Court has not held that with regard to temporary statute or rules, the rights and liabilities accrued under the repealed statute are ipso facto terminated. In that case, the Court considered the contention whether the proceedings validly continued on the complaint instituted on 17-3-19[SECTION]8 in respect of a charge under [SECTION] of the [ACT] when that Rule was omitted by Notification dated 30-3-19[SECTION]5. By Notification dated 30-3-19[SECTION]5 Defence of India (Amendment) Rules, 19[SECTION]5 were promulgated. Clause 2 of these Amendment Rules reads as under :
"In the [ACT], 19[SECTION]2, [SECTION] (relating to prohibition of dealings in foreign exchange) shall be omitted except as respects things done or omitted to be done under that rule."
Thereafter the Court dealt with the contention raised by the learned Advocate for the petitioners and arrived at the conclusion that the complaint made for the offence under [SECTION] of the [ACT], after 1st April, 19[SECTION]5 when the Rule was omitted, has to be held invalid. The relevant observation is as under :
"The argument of Mr. [ENTITY] was that, even if there was a contravention of [SECTION] by the accused when that Rule was in force, the act of contravention cannot be held to be a 'thing done or omitted to be done under that rule', so that, after that rule has been omitted, no prosecution in respect of that contravention can be instituted. He conceded the possibility that, if a prosecution had already been started while [SECTION] was in force, that prosecution might have been competently continued. Once the Rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force. We are inclined to agree with the submission of Mr. [ENTITY] that the language contained in clause 2 of the Defence of India (Amendment) Rules, 19[SECTION]5 can only afford protection to action already taken while the rule was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist. On this interpretation, the complaint made for the offence under [SECTION] of the [ACT], after 1st April, 19[SECTION]5 when the rule was omitted, has to be held invalid."
From the aforesaid discussion, it is apply clear that the Court concentrated upon the Amendment in the Rules and held that a thing done or omitted to be done under that Rule is saved as per Clause 2. The Court also specifically observed that the language contained in Clause 2 of the Defence of India (Amendment) Rules, 19[SECTION]5, can only afford protection to action already taken while the Rule was in force and that a new act of initiating a proceeding cannot be considered to be a thing done. In paragraph 15 the Court observed that [SECTION] of the [ACT] cannot apply on the omission of [SECTION] of the [ACT] for the two reasons that [SECTION] applies to repeals and not to omission, and applies when the repeal is of a Central Act or Regulation and not to a Rule.
34. In view of the aforesaid discussion, we are not applying the provisions of [SECTION] of the [ACT]; but that would not mean that when the Statutory Rules are omitted or submitted, the Rules of Interpretation would not be applicable. The aforesaid aspect is considered by the Supreme Court in the case of D. K. Trivedi & Sons v. State of Gujarat, AIR 198[SECTION] S.C. 1323 : [198[SECTION] (2) GLR 1[SECTION] (S.C.)]. While dealing with the provisions of the [ACT] and the Rules framed under [ACT] by the Gujarat Government known as Gujarat Minor Mineral Rules, 19[SECTION]5, the Court held that, though [SECTION] of the [ACT] does not in express terms refer to rules made under an Act, the same principle of construction would apply in the case of rules made under an Act. The relevant observation in paragraph [SECTION]3 is as under :
"We are unable to accept either the above conclusions reached by the Gujarat High Court or the reasoning upon which these conclusions were based. The Explanation to [SECTION] provided that 'For the purpose of this rule [SECTION] as substituted by the Gujarat Minor Minerals (Third Amendment) Rules, 19[SECTION][SECTION]'. Thus, the reference to [SECTION] in [SECTION] was to [SECTION] as substituted by the Notification dated November 25, 19[SECTION][SECTION]. That Schedule was however again substituted by the 1974 Notification. The effect of such substitution was to repeal the 19[SECTION][SECTION] [SECTION] and to substitute it by a new [SECTION]. Under [SECTION] of the [ACT], where the said Act or any Central act or Regulation made after the commencement of the said Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed are, unless a different intention appears, to be construed as references to the provision so re-enacted. Though [SECTION] of the [ACT] does not in express terms refer to rules made under an Act, the same principle of construction would, in our opinion, apply in the case of rules made under an Act."
35. From the aforesaid discussion, even without applying the provisions of [SECTION] of the [ACT], the Rules of Interpretation, which are applicable for interpreting the statutory rules, would apply in the case of substitution or omission of the rules and their re-enactment. Not only this but the liability to pay the duty of excise, which is crystallised on the date of production or manufacture of the goods, would not cease merely because there is change or modification in the procedure for its recovery. The liability to pay the duty of excise is a perfected debt. Even if there was change or repeal in some part of [SECTION] of the Act, yet the liability to pay the duty of excise would not cease unless expressly provided in the [ACT]. Further, so far as the past liability to pay the duty of excise is concerned, unless the [ACT] has retrospective effect, it would not be in any way affected. In this view of the matter, in our view, it is difficult for us to accept the ratio laid down in two cases, namely Amit Processors Pvt. Ltd. (supra) and Mahendra Mills Ltd. (supra) that the proceedings initiated under [SECTION] or [SECTION] would come to an end as soon as the said Rules are substituted by [SECTION] with effect from [SECTION]th August, 1977. The same would be the result with regard to omission of [SECTION] with effect from 17th November, 1980. In case of M/s. Rayala Corporation (supra), rule relating to prohibition of dealings in foreign exchange which was punishable under [SECTION] of the [ACT], was itself deleted. By substitution of [SECTION] or by its omission, there is no amendment or deletion in the charging [SECTION] of the Act. Therefore, the aforesaid decision would have no bearing at the conclusion that the proceedings initiated under [SECTION] or [SECTION] which are substituted by [SECTION] with effect from [SECTION]th August, 1977 would not come to an end.
3[SECTION]. In this connection, it is necessary to state that, in the case of [PRECEDENT] the Madhya Pradesh High Court has taken a view that by omission of [SECTION] and by introducing [SECTION] with effect from 17th November, 1980, the principles relating to repeal or omission of an enactment would not apply and that a saving clause is not needed to continue the proceedings initiated prior to such a change being brought about by shifting the provision from one part of the Act to another. The Court held that this was the case where there has neither been any repeal nor omission of an enactment but continuance of the same provision throughout as a part of the Act, the only difference being that prior to 17th November, 1980 it was in one part of the Act and subsequent to that date, it is in another part of the Act. The Court therefore negatived the contention that the proceedings initiated under [SECTION] after its omission would result in automatic termination of the proceedings initiated earlier by issuing a notice under that Rule. Further in the case of Kolhapur Cane Sugar Works Ltd. v. Union of India, 198[SECTION] (24) E.L.T. 205 (Del.), after elaborate considerations of the contentions raised by the parties, the Delhi High Court has negatived the similar contention. In this view of the matter, it is difficult for us to agree with the decisions rendered in the case of [PRECEDENT]), in the case of [PRECEDENT]) and in the case of [PRECEDENT]) that the proceedings initiated under [SECTION] or [SECTION] would lapse after substitution by [SECTION].
[SECTION]. In the result, as regards to the question which is referred to the larger Bench, we hold that the notices issued or actions taken under the substituted [SECTION] and [SECTION] or [SECTION] of the [ACT] would not stand discharged or terminated upon substitution or omission, as the case may be. The proceedings initiated under [SECTION] or [SECTION] for recovery of duty of excise by issuance of a show cause notice would not come to an end or lapse as soon as [SECTION] and [SECTION] are substituted with effect from [SECTION]th August, 1977 or as soon as [SECTION] is omitted with effect from 17th November, 1980. We therefore answer the question accordingly.