1992 (5) TMI 25 - HC - Central Excise

Summary

Issues:
Challenge to show cause notices dated 27th June, 1980 and 30th November, 1982 - Period of limitation under Rule 10 of Central Excise Rules - Allegations of fraud, collusion, or suppression of facts - Allegations of contravention of rules to evade duty - Interpretation of notification exempting certain goods from duty - Reopening of case beyond the limitation period - Appeal to Supreme Court against Tribunal's order - Quashing of show cause notice based on lack of suppression of facts.

Analysis:

The petitioner challenged two show cause notices dated 27th June, 1980 and 30th November, 1982, concerning the periods from 1-4-1973 to 11-8-1977 and 24-4-1980 to 31-7-1989, respectively. The issue revolved around the period of limitation as per Rule 10 of the Central Excise Rules, which allows the recovery of duties within six months from the relevant date, extending to five years in cases of fraud, collusion, or contravention with intent to evade payment. The petitioner was not accused of any such wrongdoing, and the show cause notices lacked allegations of suppression of facts or contravention of rules to evade duty.

The Excise Officers based their case on a notification exempting certain goods from duty, leading to the inference that duty was leviable on the goods before a specific date. The petitioner's counsel argued that this interpretation was a new view of the law contradicting previous interpretations, which should not warrant reopening the case beyond the six-month limitation period. Additionally, it was highlighted that no appeal was made to the Supreme Court against the Tribunal's order, indicating a lack of basis for the Excise Authority's position.

Ultimately, the Court found in favor of the petitioner, emphasizing the absence of any suppression of facts in the show cause notices. Consequently, the impugned show cause notice was quashed, and the writ petition was disposed of accordingly. The petitioner was granted a Xerox copy of the order, with instructions to obtain a certified copy through the usual procedure.