1992 (7) TMI 87 - HC - Central Excise

Demand for extended period of five years - Jurisdiction - Show cause notice - Amendment thereto

Summary

Issues Involved:
1. Scope of sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944.
2. Jurisdiction of the Superintendent of Central Excise to issue show cause notices based on suppression.
3. Validity of amending or deleting portions of the show cause notices.

Detailed Analysis:

Issue 1: Scope of sub-section (1) of Section 11A of the Act
The court analyzed sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944, which allows a Central Excise Officer to serve a notice within six months for duties not levied, short-levied, or erroneously refunded. The proviso to this section extends this period to five years if the short levy is due to fraud, collusion, or suppression of facts, and specifies that only the Collector of Central Excise can issue such notices. The court emphasized that the first portion of sub-section (1) operates independently from the proviso, meaning that non-levy or short-levy not involving fraud or suppression can be addressed by any Central Excise Officer within six months. However, if fraud or suppression is involved, the Collector must issue the notice within five years.

Issue 2: Jurisdiction of the Superintendent of Central Excise
The appellant argued that since the show cause notices were based on suppression, only the Collector had jurisdiction to issue them. The court agreed, stating that when suppression is cited as the reason for short-levy, the case falls under the proviso of sub-section (1) of Section 11A, making the Superintendent's issuance of the notices invalid. Consequently, the court held that the Superintendent of Central Excise could not issue show cause notices on the grounds of suppression, as this was within the exclusive jurisdiction of the Collector.

Issue 3: Validity of Amending or Deleting Portions of the Show Cause Notices
The court addressed whether the offending words indicating suppression could be deleted from the show cause notices, thus validating them within the Superintendent's jurisdiction. The Central Government's counsel argued for the deletion, asserting that the integrity of the notices would remain intact. The appellant opposed this, claiming that the notices could not be amended to fit within the Superintendent's jurisdiction once issued. The court found in favor of the respondents, ruling that the power to issue notices includes the power to amend or delete portions of them. As long as the deletion does not affect the core intent of the notice, it is permissible. Therefore, the court allowed the deletion of the words "and suppressed such a fact from the department with an intent to evade payment of Central Excise duty," enabling the notices to proceed lawfully.

Conclusion:
The court partly allowed the appeal, modifying the learned Single Judge's order. It permitted the respondents to proceed with the show cause notices after deleting the offending words related to suppression. The appellant was granted 60 days to file objections to the amended show cause notices. The court left the merits of the case open for further consideration and ordered no costs.