2012 (11) TMI 603 - HC - Central Excise

Extended period of limitation - SCN - allegations about willfull suppression of the facts of manufacture and clearance of branded manufactured tobacco and roasted cut Supari - contention raised by learned counsel for the petitioners that before deciding the objections raised in reply to the earlier show cause notice dated 19.08.2011 (Annexure P8), the impugned show cause notice dated 6.01.2012 could not have been issued by the first respondent is wholly misconceived Held that - It is not a case of prejudging of the issue and that it is not a case of the show cause notice being without jurisdiction - writ petition deserves to be and is hereby dismissed in limine.

Issues:
Challenge to show cause notice invoking provisions of Section 11A of the Central Excise Act, 1944; Prejudgment of the issue by the Commissioner; Validity of the impugned show cause notice; Applicability of extended period of 5 years; Relief claimed in the petition; Interpretation of relevant provisions and case law; Justification for interference at the show cause notice stage; Legal provisions for issuance of show cause notice; Jurisdiction of the authorities; Adjudication of earlier show cause notice; Misconception regarding issuance of show cause notice.

Analysis:

1. Challenge to Show Cause Notice under Section 11A:
The petitioners challenged the show cause notice invoking Section 11A of the Central Excise Act, 1944. They argued that a prior notice had been issued based on similar allegations, and submitting a reply to the impugned notice would be futile due to prejudgment by the Commissioner. The petitioners sought relief based on judgments from the High Court of Madras and the Supreme Court.

2. Prejudgment Issue by the Commissioner:
The petitioners contended that the Commissioner had prejudged the issue by issuing the impugned show cause notice before deciding on the earlier notice. However, the court found that the impugned notice only expressed a prima facie view on the allegations of willful suppression, distinguishing it from the cases cited by the petitioners.

3. Validity of the Impugned Show Cause Notice:
The court analyzed the language of the impugned notice, noting that it highlighted willful suppression of facts regarding the goods in question. The court concluded that the petitioners' contentions lacked merit as the notice did not prejudge the issue, contrary to the arguments presented.

4. Applicability of Extended Period of 5 Years:
The petitioners relied on a Supreme Court judgment to argue against the applicability of the extended 5-year period. However, the court held that the petitioners could raise this issue in their reply to the notice, allowing the Commissioner to decide on the duty and penalty imposition.

5. Interpretation of Relevant Provisions and Case Law:
The court examined the provisions of the Act and the case law cited by the petitioners to assess the merit of their arguments. It found that the impugned notice did not prejudge the matter, and the judgments cited were not applicable due to differences in language and context.

6. Justification for Interference at Show Cause Notice Stage:
The court emphasized that the petitioners could present their defenses and objections to the notice before the Commissioner, followed by the appeal process as per the Act. It dismissed the need for a writ of prohibition to halt the proceedings based on the petitioners' arguments.

7. Jurisdiction of the Authorities and Adjudication Process:
The court clarified that there was no legal requirement for the authorities to adjudicate on a prior notice before issuing a subsequent show cause notice. It highlighted the availability of remedies through appeal and revision against decisions made by the assessing officer.

8. Misconception Regarding Issuance of Show Cause Notice:
The court addressed the misconception raised by the petitioners regarding the issuance of the impugned notice before deciding on the earlier notice. It concluded that there was no prejudgment of the issue and no lack of jurisdiction, leading to the dismissal of the writ petition.

In conclusion, the High Court of Madhya Pradesh dismissed the writ petition challenging the show cause notice issued under Section 11A of the Central Excise Act, 1944. The court found no merit in the petitioners' contentions of prejudgment by the Commissioner and upheld the validity of the impugned notice. It emphasized the petitioners' right to present their defenses and objections during the adjudication process, without the need for a writ of prohibition to halt the proceedings. The court clarified the jurisdiction of the authorities and the availability of remedies through appeal and revision, ultimately dismissing the petition in limine.

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