1994 (1) TMI 108 - HC - Central Excise

Summary

Issues:
Challenge to show cause notice and trade notice based on Circular No. 2/93 - Quashing sought by appellants. Jurisdiction under Article 226 to entertain writ petition. Consideration of Rule 57F(4) or Rule 57F(2) by Adjudicating Authority. Direction to Authorities to consider all contentions raised by petitioner in reply to show cause notice.

Analysis:
The judgment pertains to two writ appeals challenging a common order dated 29-11-1993 passed by a learned single Judge in W.P. Nos. 20428 and 20429 of 1993. The appellants sought to quash a show cause notice dated 30-8-1993 and a trade notice dated 5-2-1993 issued by the Additional Collector of Central Excise, Madras, based on Circular No. 2/93. The show cause notice directed the appellant to show cause for the removal of goods under Rule 57F(4) and demanded a duty of Rs. 16,37,827. The trade notice altered the treatment of partially processed material under Rule 57F(2) to Rule 57F(4) as per the circular issued by the Board. The learned single Judge rejected the writ petition, emphasizing the opportunity for the appellant to present a defense to the show cause notice.

The judgment discusses the exercise of jurisdiction under Article 226 of the Constitution of India concerning show cause notices. It is noted that such jurisdiction is not typically entertained unless in exceptional cases, as the party issued the notice has the right to file objections, which the adjudicating authority must consider. The judgment highlights the availability of appeal options for aggrieved parties, including to the Customs, Excise, and Gold (Control) Appellate Tribunal. The learned single Judge's decision to refuse jurisdiction under Article 226 is deemed justified in this context.

However, the appellant's counsel argued that the Adjudicating Authority failed to consider whether Rule 57F(4) or Rule 57F(2) applied to the case due to the trade notice issued post the circular. The judgment underscores that the Authority issuing the show cause notice must consider all objections raised by the party and decide accordingly. In light of this, a direction is issued for the Authorities to consider all contentions raised by the petitioner in response to the show cause notice. The judgment modifies the order, allowing the appellant to file objections within 30 days, with subsequent hearing and decision by the Adjudicating Authority. Any observations contrary to these directions by the learned single Judge are disregarded, and no costs are awarded in the matter.