1993 (2) TMI 107 - HC - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Collector of Central Excise to issue the show-cause notice.
2. Exercise of jurisdiction under Article 226 of the Constitution against the show-cause notice.
3. Validity and appropriateness of the show-cause notice issued under Section 11A of the Central Excises and Salt Act, 1944.
4. Applicability of prior judgments and precedents to the current case.

Detailed Analysis:

1. Jurisdiction of the Collector of Central Excise to issue the show-cause notice:
The appellant contended that the Collector of Central Excise lacked jurisdiction to issue the show-cause notice. The court examined Section 11A of the Central Excises and Salt Act, 1944, which allows the Collector to issue such notices in cases involving suppression of facts. The court concluded that the show-cause notice did not suffer from a lack of jurisdiction as it was issued under Section 11A on grounds of suppression of facts with the intent to evade payment of Central Excise duty. The court stated, "As per the proviso to Section 11A(1) of the Act, the Collector of Central Excise is competent to issue show-cause notice on the ground of suppression of facts."

2. Exercise of jurisdiction under Article 226 of the Constitution against the show-cause notice:
The court analyzed whether it was appropriate to exercise jurisdiction under Article 226 of the Constitution at the stage of a show-cause notice. It referred to the Supreme Court's decision in Geep Flashlight Industries Ltd. v. Union of India, which held that no certiorari jurisdiction is attracted by a show-cause notice, as it is not a final order but a proposition. The court emphasized that "certiorari jurisdiction is not intended to by-pass the statutory provisions," and highlighted the Supreme Court's admonition in Assistant Collector of Central Excise v. Dunlop India Ltd., stating, "Art. 226 is not meant to short circuit or circumvent statutory procedures." The court concluded that the appellant must exhaust the statutory remedies before approaching the court.

3. Validity and appropriateness of the show-cause notice issued under Section 11A of the Central Excises and Salt Act, 1944:
The show-cause notice was issued under Section 11A for the alleged contravention of various Central Excise Rules and for evading duty payment on CTD bars (TOR STEEL) manufactured and cleared without a license. The notice required the appellant to show cause why the duty amounting to Rs. 77,68,157.25 should not be demanded and why a penalty should not be imposed. The court found that the notice provided the appellant with an opportunity to present evidence and be heard, thus ensuring due process. It stated, "The appellant has been directed to show cause within 30 days. Therefore it is clear from the show cause notice that no decision has been taken ex parte."

4. Applicability of prior judgments and precedents to the current case:
The appellant relied on several judgments to support their case. The court reviewed these judgments:

- Mysore Acetate and Chemicals Co. Ltd. v. Assistant Collector, Central Excise, Mysore: The court found the proposition too wide and not applicable, stating, "It cannot be presumed that the authority will stick to the view expressed in the show cause notice."

- Alembic Glass Industries Limited v. Union of India and Others: The court noted that the decision was based on undisputed facts and the long pendency of the case, thus not serving as a general precedent.

- Victory Glass and Industries Ltd. v. Collector of Central Excise: The court observed that the case involved specific circumstances of a search and quantification of duty, making it inapplicable as a general rule.

The court concluded that the current case did not fall within the exceptions that justify invoking Article 226 and emphasized that the appellant must first respond to the show-cause notice and exhaust statutory remedies. The appeal was rejected, with the court stating, "We do not see any ground to admit this appeal. It is accordingly rejected."