In Brief
Punjab National Bank challenged confiscation orders of Rathi Ispat Ltd.'s property issued by Central Excise authorities under Rule 173Q(2) of the Central Excise Rules, 1944. The Supreme Court held that the confiscation orders were invalid because they were passed on 26.03.2007 and 29.03.2007, when Rule 173Q(2) had already been omitted from the statute on 12.05.2000. The Court rejected arguments that Section 38A of the Central Excise Act or Section 6 of the General Clauses Act saved the proceedings. Additionally, the Court affirmed that a secured creditor under the SARFAESI Act, 2002 has priority over the Crown's unsecured excise dues, even after insertion of Section 11E in the Central Excise Act. The appeal was allowed and confiscation orders were quashed.
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