1996 (7) TMI 158 - HC - Central Excise

Summary

Issues:
1. Validity of the show cause notice under Section 11A of the Central Excises and Salt Act, 1944.
2. Allegation of duty evasion and penalty imposition under Rule 9(2) read with Rule 173Q of the Central Excise Rules, 1944.
3. Claim of exemption under Notification No. 71/78 and subsequent amendments.
4. Dispute regarding the classification of clearances and clubbing of units for duty calculation.
5. Allegation of wilful misrepresentation and suppression of facts leading to penalty imposition.
6. Availability of alternative remedies under Chapter VIA of the Act for appeal and revision.

Analysis:
1. The petition challenged the show cause notice issued under Section 11A of the Central Excises and Salt Act, 1944, contending that it was time-barred. However, the plea was dismissed based on the proviso to Section 11A, allowing for a longer limitation period in case of misrepresentation or suppression of facts leading to duty evasion.
2. The Collector of Central Excise ordered the payment of duty and imposed a penalty under Rule 9(2) read with Rule 173Q of the Central Excise Rules, alleging duty evasion and wilful misrepresentation by the petitioners. The Central Board of Excise and Customs upheld this decision, citing the deliberate misleading of the department by suppressing facts.
3. The petitioners claimed exemption under Notification No. 71/78 and subsequent amendments, but the authorities found that they were not entitled to the exemption due to common ownership, management, and financial reporting among the units. The limitation period for duty recovery was extended to five years due to the alleged misrepresentation.
4. There was a dispute regarding the classification of clearances and clubbing of units for duty calculation, with the petitioners arguing against the aggregation of clearances from different units. However, the authorities upheld the duty calculation based on the common ownership and financial ties between the units.
5. The penalty imposition was justified by the authorities as a case of wilful misrepresentation, leading to an attempt to take advantage of the exemption notification. The courts found no infirmity in the orders, as the petitioners failed to substantiate their challenge to the authorities' conclusions.
6. Despite the availability of alternative remedies under Chapter VIA of the Act for appeal and revision, the petitioners approached the High Court directly. The court noted the availability of appeal to the appellate tribunal and revision by the Central Government but decided to address the petition on its merits. The court ultimately dismissed the writ petition, finding no grounds for interference with the impugned orders.