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Challenge to validity of proceedings initiated by first respondent for breach of Central Excise Rules and confiscation of art silk fabric. Validity of fresh show cause notice issued by first respondent after order of Central Board of Revenue vacated previous order. Analysis: Issue 1: Challenge to validity of proceedings for breach of Central Excise Rules and confiscation of fabric The petitioners, engaged in manufacturing art silk fabrics, were issued a notice by the Superintendent of Excise for alleged breaches of Rules 96 K (3) (a) and 198 (1) of the Central Excise Rules, along with a show cause notice for confiscation of the fabric. After a written statement and hearing, the second respondent imposed penalties and directed confiscation. The petitioners appealed to the Central Board of Revenue, contending a violation of natural justice. The Central Board of Revenue, acknowledging this violation, vacated the order of the second respondent without prejudice to the merits of the case, indicating a need for further inquiry into the charges. Issue 2: Validity of fresh show cause notice The petitioners challenged the validity of a subsequent show cause notice issued by the first respondent, identical to the previous notice, based on the same facts and offenses. The petitioners argued that the Central Board of Revenue's order did not authorize a fresh inquiry into the same charges. However, the High Court interpreted the Central Board of Revenue's order as intending to keep the proceedings alive for a merit-based inquiry, despite not explicitly mentioning remand or de novo inquiry. The Court emphasized the significance of the phrase "without prejudice to the merits of the case," indicating the need for further investigation into the charges against the petitioners. In conclusion, the High Court dismissed the petition, upholding the validity of the fresh show cause notice issued by the first respondent after the Central Board of Revenue's order, emphasizing the need for a merit-based inquiry into the alleged breaches of Central Excise Rules and confiscation of art silk fabric.
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