2003 (6) TMI 429 - AT - Central Excise

Summary

Issues:
1. Eligibility for small scale exemption under Notification No. 16/97-C.E.
2. Jurisdiction of the Superintendent to issue Show Cause Notice.

Eligibility for small scale exemption under Notification No. 16/97-C.E.:
The appeal involved the issue of whether M/s. Pahawa Chemicals (P) Ltd. were entitled to the benefit of small scale exemption under Notification No. 16/97-C.E., dated 1-4-97. The Appellants argued that the impugned order could not stand as it was based on a previous remanded matter and had already been decided against them by the Appellate Tribunal twice. The Departmental Representative contended that the Appellants were not eligible for the exemption as they used a foreign brand name for their product, citing previous Tribunal decisions. The Appellate Tribunal noted that the issue had been remanded to the Commissioner (Appeals) for a speaking appealable order, which was duly passed after hearing the Appellants. The Tribunal found that the impugned order was in line with the remand order and rejected the Appellants' claim that it exceeded the scope of the remand. The Tribunal also upheld the Commissioner's finding that the Show Cause Notice was issued within the normal period of limitation, and there was no reason to challenge it. The Tribunal concluded that the Appellants were not entitled to the small scale exemption, and the appeal was rejected.

Jurisdiction of the Superintendent to issue Show Cause Notice:
The Appellants argued that the Show Cause Notice issued by the Superintendent was invalid as it contained allegations of wilful misstatement, which, according to Board Circulars, should only be issued by the Commissioner/Additional Commissioner. They also contended that the Deputy Commissioner could not confirm a demand beyond the monetary limit prescribed in a Board Circular. However, the Tribunal found that the Commissioner (Appeals) had specifically stated that the Appellants were not called upon to show cause for invoking the extended period under the Central Excise Act, as the demand fell within the normal period of limitation. The Tribunal upheld the Commissioner's finding that the Show Cause Notice was validly issued within the specified period and that the Superintendent had the jurisdiction to issue it. The Tribunal dismissed the argument that the Board Circulars were binding in this case, as they were administrative directions and did not prejudice the Appellants. Consequently, the Tribunal found no reason to refer the matter to a Larger Bench and rejected the appeal.

In conclusion, the Appellants were not eligible for the small scale exemption, and the Show Cause Notice issued by the Superintendent was deemed valid within the normal period of limitation, with the Tribunal rejecting the appeal on both grounds.