1997 (8) TMI 455 - AT - Central Excise

Summary

Issues:
Appeal against duty demand, penalty imposition, and confiscation without issuance of Show Cause Notice.

Analysis:
The appellant filed an appeal challenging the duty demand, penalty imposition, and confiscation without the issuance of a Show Cause Notice. The appellant did not contest the confiscation or the release of goods but focused solely on the demand for duty without a formal notice. The appellant argued that Section 11A mandates the issuance of a Show Cause Notice before confirming duty, citing Supreme Court decisions emphasizing this requirement. Additionally, the appellant highlighted Rule 233A of the Central Excise Rules, stating that while oral notices may be permissible for confiscation and penalties, a written notice is necessary for duty demands. The appellant's letter indicated payment under protest, reservation of appeal rights, and emphasized the need for an appealable order, signifying non-concession to the duty payment.

The Department's representative contended that the appellant had waived the Show Cause Notice and personal hearing in a letter dated 19-6-1995. Referring to Section 11A, the Department argued that the use of "may" allows for such waivers, asserting that the appellant's waiver precluded any prejudice, given the statutory provisions. The Department distinguished a previous case without a duty demand and emphasized the significance of the term "may" in Section 11A, enabling waivers by assessees.

Upon considering both arguments, the Tribunal reviewed the appellant's letter dated 19-6-1995, which indicated payment under protest, reservation of appeal rights, and a request for waiver of procedural formalities. The Tribunal noted that while oral notices may suffice for confiscation and penalties under Rule 233A, a written notice is mandatory for duty demands under Section 11A. Citing a previous Tribunal decision, the Tribunal held that the appellant's rights were violated due to the absence of a proper Show Cause Notice, emphasizing the importance of natural justice principles. Consequently, the Tribunal set aside the duty demand of Rs. 9,30,801, remitting the matter for a de novo decision after issuing a Show Cause Notice, while confirming the confiscation. The deposited duty amount would be subject to the final adjudication outcome.

In conclusion, the Tribunal upheld the necessity of a formal Show Cause Notice before confirming duty demands, emphasizing adherence to legal provisions and principles of natural justice. The Tribunal's decision highlighted the significance of procedural fairness and the statutory requirements for due process in excise duty matters.