1996 (11) TMI 92 - HC - Central Excise

Issues Involved:

1. Validity of the show cause notice issued by the Central Government under Section 35EE(4) of the Central Excise Act.
2. Applicability of the limitation period to the exercise of suo motu revisionary powers under Section 35EE(4).
3. Compliance with Section 35EE(5) and Section 35EE(6) of the Central Excise Act.
4. Whether the show cause notice was issued within a reasonable time.
5. Maintainability of the writ petition challenging the show cause notice.

Issue-wise Detailed Analysis:

1. Validity of the Show Cause Notice:

The petitioner challenged the show cause notice issued by the Central Government under Section 35EE(4) of the Central Excise Act, arguing that it was arbitrary and without jurisdiction. The petitioner contended that the notice was issued after the Government of India failed in its appeal before the Appellate Tribunal, and thus, invoking revisional powers was unjustified. The Court, however, found that the Central Government has the authority to issue such notices under Section 35EE(4) and that the suo motu power of revision is validly exercised as per the statutory requirements.

2. Applicability of the Limitation Period:

The petitioner argued that a limitation period should be read into Section 35EE(4) of the Central Excise Act, similar to other sections like 35, 35B, 35E, and 35EE(1). The Court rejected this argument, stating that when the legislature has not prescribed a period of limitation, it is not open to the Court to introduce one. The Court referred to the Supreme Court decision in Government of India v. Citadel Fine Pharmaceuticals, which held that the absence of a limitation period in a rule does not make it unreasonable or violative of Article 14 of the Constitution. Therefore, the Court concluded that no period of limitation could be read into Section 35EE(4).

3. Compliance with Section 35EE(5) and Section 35EE(6):

The petitioner contended that the show cause notice violated Section 35EE(5) and Section 35EE(6) of the Act. The Court found that Section 35EE(5), which deals with enhancing penalties or fines, was not applicable as the case did not involve such enhancements. Regarding Section 35EE(6), which requires a show cause notice within the time limit prescribed under Section 11A for cases of duty not levied or short-levied, the Court held that this section was also not applicable. The duty had already been levied but was set aside on appeal, so the provisions of Section 35EE(6) did not apply.

4. Reasonableness of the Time Taken to Issue the Notice:

The Court examined whether the show cause notice was issued within a reasonable time. It considered the sequence of events, including the appeal process and the High Court's decision in W.P. No. 5698 of 1986. The Court concluded that there was no unreasonable delay by the Central Government in issuing the show cause notice, as it acted promptly after the High Court's decision.

5. Maintainability of the Writ Petition:

The Court addressed the maintainability of the writ petition challenging the show cause notice. Although the respondents did not challenge the maintainability, the Court opined that the writ petition was not maintainable. The Court emphasized that the petitioner should have allowed the statutory process to proceed rather than seeking judicial intervention at the show cause notice stage. Consequently, the writ petition was dismissed.

Conclusion:

The Court dismissed the writ petition challenging the show cause notice issued under Section 35EE(4) of the Central Excise Act. It held that no limitation period applies to the exercise of suo motu revisionary powers under Section 35EE(4), and the show cause notice was issued within a reasonable time. The Court also found that the provisions of Section 35EE(5) and Section 35EE(6) were not applicable in this case, and the writ petition was not maintainable.

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