1987 (6) TMI 67 - HC - Central Excise

Summary

Issues:
1. Interpretation of a notification regarding exemption from excise duty on copper alloy pipes and tubes.
2. Allegations of suppression of information and wrong claiming of set-off by the petitioners.
3. Legality of issuing multiple show cause notices for the same alleged offense.
4. Application of the law of limitation in excise duty cases.

Analysis:

1. The petitioners were involved in manufacturing copper alloy pipes and tubes subject to excise duty under Item 26A. They availed exemption under a specific notification that exempted duty on pipes and tubes using duty-paid copper or copper alloys. The dispute arose when the Government alleged that the petitioners wrongly claimed set-off due to suppressed information about copper content.

2. Initially, a show cause notice was issued in 1972, but after proceedings were dropped, another notice was issued in 1975 for a similar alleged offense. The petitioners argued against the second notice, citing the earlier dropped proceedings and the limitation period for such actions. The Assistant Collector demanded a sum, which was later set aside by the Appellate Collector.

3. Subsequently, the Government sought to review the Appellate Collector's decision, leading to the petitioners challenging the orders in court under Article 226 of the Constitution. The Court noted the Government's persistence in pursuing the matter despite earlier dropped proceedings and the overlapping periods in the notices, deeming the second notice unwarranted in law.

4. The Court accepted the petitioners' arguments on the interpretation of the notification and the limitation period for excise duty claims. It found the Government's actions to be against the law of limitation and struck down the decisions, quashing the orders and notices issued by the authorities. The Court also directed the respondents to pay the costs of the petitioners.

In conclusion, the judgment primarily focused on the correct interpretation of the notification, the legality of issuing multiple notices for the same offense, and the application of the law of limitation in excise duty cases. The Court ruled in favor of the petitioners, highlighting the errors in the Government's actions and ultimately setting aside the orders and notices issued against the petitioners.