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Issues: Show cause notice validity, Lack of jurisdiction, Interpretation of Notifications, Time limitation for service of show cause notice, Allegations of fraud and wilful evasion, Penalty and interest provisions
The judgment delivered by Ajoy Nath Ray, J., at the High Court at Calcutta pertains to a writ petition challenging a show cause notice issued by the Commissioner of Central Excise, Calcutta. The show cause notice demanded payment of Central Excise duty amounting to approximately Rs. 2.40 crores. The petitioner argued that the notice lacked jurisdiction, emphasizing the period of manufacture from April 1993 to March 1995 during which they produced Platinum and Rhodium wires without using gold in their manufacturing process. The petitioner claimed that their products were never of gold. The controversy revolved around the interpretation of Notifications and Amendments from 1988 to 1995 concerning the exemption of precious materials from excise duty. The court noted that while there were provisions exempting certain materials, there was no explicit prohibition on Platinum wires being fully exempt from duty. The court refrained from delving into the intricate details of the Notifications, stating that such interpretations should be initially addressed by the Department. It highlighted that the show cause notice, served beyond six months for the period in question, required allegations of fraud or improprieties under Section 11A of the Central Excise Act to extend the limitation period to five years. The mention of penalty and interest in the notice was deemed without jurisdiction as the relevant provisions were inserted after the material time. Despite the use of the phrase "wilful evasion" in the notice, the court found no evidence of fraud, suppression, or wilful evasion on record. The judgment emphasized that without such elements and considering the time elapsed since the period in question, the writ application must succeed. Consequently, the court quashed the impugned show cause notice and granted Rule Absolute as prayed for in the writ petition. In conclusion, the judgment carefully analyzed the jurisdictional issues, the interpretation of legal provisions, and the absence of fraud or suppression allegations in the show cause notice. It underscored the importance of adhering to statutory limitations and requirements in excise matters, ultimately ruling in favor of the petitioner due to the lack of substantive grounds for the demand raised in the notice.
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