2017 (5) TMI 1376 - AT - Central Excise

Validity of SCN - Held that - once a SCN is issued by invoking the provisions for extended period on the basis of suppression of facts then the same facts cannot be the grounds for issue of subsequent SCN invoking proviso for extended period - Since the entire records on the basis of which both the SCN were issued came within the knowledge of Revenue on 11/03/2003, the impugned SCN dated 30/12/2003 is not tenable - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Validity of Show Cause Notices issued for Central Excise duty demand.
2. Application of the ruling of Hon'ble Supreme Court in a specific case.
3. Allegations of repetition in subsequent Show Cause Notices.

Analysis:

Issue 1: Validity of Show Cause Notices issued for Central Excise duty demand
The appeal was filed by Revenue against Order-in-Appeal No. 118-CE/LKO/2009 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Lucknow. The case involved the manufacture and sale of Electrical Panel Boards under Chapter Sub-heading No.8537.00 of the Central Excise Tariff Act, 1985. The respondents were issued Show Cause Notices demanding Central Excise duty for the period of Financial Year 1997-98. The first Notice dated 31/03/2003 demanded &8377; 59,786/-, and the second Notice dated 30/12/2003 demanded &8377; 13,31,552/-. The Order-in-Original confirmed the demand and penalty, which was challenged by the respondents in an appeal before the Commissioner (Appeals). The Commissioner held that the subsequent Notice dated 30/12/2003 was not sustainable as the facts were already known to Revenue, citing a ruling of the Hon'ble Supreme Court. Consequently, the appeal was dismissed, granting the respondents consequential relief if applicable.

Issue 2: Application of the ruling of Hon'ble Supreme Court
The main contention of Revenue was that the ruling of the Hon'ble Supreme Court in a specific case was distinguishable from the present case. They argued that the subsequent Show Cause Notices contained practically the same allegations as the first Notice, covering the period from 1997-98 to 2001-02. However, the Tribunal, after considering the arguments and records, applied the principle established by the Hon'ble Supreme Court. The Tribunal noted that once a Show Cause Notice is issued based on suppression of facts for an extended period, subsequent Notices cannot be issued on the same grounds. As the facts were known to Revenue before the first Notice, the subsequent Notice dated 30/12/2003 was deemed untenable, leading to the dismissal of Revenue's appeal.

Issue 3: Allegations of repetition in subsequent Show Cause Notices
The Tribunal deliberated on the contention of Revenue regarding the repetition of allegations in the subsequent Show Cause Notices. It was observed that the period covered by all the Notices was from 1997-98 to 2001-02. However, the Tribunal emphasized that the crucial aspect was the knowledge of Revenue regarding the facts before issuing the first Notice. The Tribunal's decision to dismiss the appeal was based on the application of the legal principle established by the Hon'ble Supreme Court, which rendered the subsequent Notice invalid due to the known facts. Consequently, the respondents were granted any consequential relief as per the law.

In conclusion, the Tribunal's judgment focused on the validity of the Show Cause Notices, the application of legal precedents, and the principle of not issuing subsequent Notices based on known facts. The decision highlighted the importance of adherence to established legal principles and the consequences of repetitive allegations in such cases.