1991 (2) TMI 115 - HC - Central Excise

Summary

Issues:
1. Validity of show cause notices issued under Section 11A of the Central Excises & Salt Act, 1944.
2. Application of limitation period for recovery of excise duty.
3. Impact of exemption notification on duty recovery for specific periods.

Detailed Analysis:

Issue 1: The petitioner challenged three show cause notices issued under Section 11A of the Act. The first notice was found to be time-barred as it was issued after the limitation period of six months from the relevant date. The court relied on the judgment in Tata Iron & Steel Co. Ltd. v. Union of India, which clarified that the demand could only be made for a period of six months prior to the service of the notice unless fraud or suppression of facts was involved.

Issue 2: Regarding the second and third show cause notices, the transactions mentioned occurred after an exemption notification was issued on 28-10-1980, exempting certain goods from excise duty. The court determined that no duty recovery could be sought for the period following the exemption notification. Consequently, the corrigenda issued to introduce allegations of suppression of facts were deemed inconsequential, and the second and third show cause notices were also invalidated.

Issue 3: The court further held that the Memorandum dated 2-4-1983, which was issued in connection with the show cause notices, could not stand once the notices were deemed invalid. As a result, the court allowed the writ application, quashed the show cause notices and memorandum, and made no order as to costs.

In conclusion, the judgment focused on the procedural and substantive aspects of excise duty recovery, emphasizing the importance of adhering to statutory limitations and considering the impact of exemption notifications on duty liabilities.