1983 (8) TMI 290 - AT - Central Excise

Summary

Issues Involved:
1. Legality of the demand notice under Rule 10 or Rule 10A.
2. Applicability of Rule 10 and time-bar limitations.
3. Nature and sufficiency of the show cause notice.
4. Requirement of a specific show cause notice under Rule 10.
5. Applicability of exemption notifications and countervailing duty.
6. Specificity of the amount in the show cause notice.
7. Period covered by the demand notice.

Detailed Analysis:

1. Legality of the demand notice under Rule 10 or Rule 10A:

The appellants contended that no notice of demand under Rule 10 or Rule 10A was served, making the demand illegal. However, the Tribunal found that the Assistant Collector of Central Excise, Ahmedabad had served a notice dated 22-12-1975 to show cause why Central Excise duty due on the goods should not be recovered. The Tribunal referenced the Supreme Court's decision in J.K. Steel Ltd. v. Union of India & Ors., which held that the mere absence of a specific rule in the notice does not invalidate it if the notice is otherwise in order.

2. Applicability of Rule 10 and time-bar limitations:

The appellants argued that Rule 10, which has a three-month time limit, was applicable, making the demand time-barred. The Tribunal rejected this, stating that the notice served was within the appropriate time frame and that the appellants' participation in the proceedings did not negate the requirement of a show cause notice under Rule 10.

3. Nature and sufficiency of the show cause notice:

The appellants claimed that the notice dated 22-12-1975 was merely a show cause notice for not taking out a license and could not be treated as a notice under Rule 10. The Tribunal disagreed, citing the Supreme Court's ruling that the absence of a specific rule in the notice does not invalidate it if the officer was competent to make demands under both Rule 9(2) and Rule 10.

4. Requirement of a specific show cause notice under Rule 10:

The appellants argued that the lack of a specific show cause notice under Rule 10 rendered the demand illegal. The Tribunal found that the notice dated 22-12-1975 was sufficient and legal, and the appellants' failure to challenge earlier orders made it inappropriate to raise this contention now.

5. Applicability of exemption notifications and countervailing duty:

The appellants contended that they should have been granted the benefit of Notification No. 69/73-C.E., dated 1-3-1973, as additional duty (countervailing duty) had been paid on the raw material. The Tribunal rejected this, stating that countervailing duty and excise duty are two different levies, and the exemption could not be claimed based on the payment of countervailing duty.

6. Specificity of the amount in the show cause notice:

The appellants argued that the notice was illegal because it did not specify the amount demanded. The Tribunal referred to the Division Bench judgment of the Delhi High Court in M/s. Hindustan Aluminium Corporation Ltd. v. Superintendent of Central Excise, which held that the absence of a specific amount does not invalidate the notice if the basis for calculation is provided.

7. Period covered by the demand notice:

The Tribunal noted that the show cause notice dated 22-12-1975 covered the period from 31-3-1973 to 31-5-1975, but the Assistant Collector's order dated 14-9-1981 demanded duty for the period from 1-10-1972 to 31-5-1975. The Tribunal ruled that the demand for the period from 1-10-1972 to 30-3-1973, which was not mentioned in the show cause notice, should be excluded, reducing the demand accordingly.

Conclusion:

The Tribunal set aside the demand for the period from 1-10-1972 to 30-3-1973 and upheld the demand for the period from 31-3-1973 to 31-5-1975. With this modification, the appeal was dismissed.