2002 (7) TMI 119 - HC - Central Excise

Summary

Issues Involved:
The petitioner sought a Writ of Prohibition to stop the respondents from proceeding with a show cause notice issued by the Collector of Central Excise, Madras, raising various grounds of challenge.

Details of the Judgment:

Issue 1: Compliance with Excise Rules and Allegations of Irregularity
The petitioner, a private limited company manufacturing excisable products, followed all rules of Central Excise, including providing notice before manufacturing, declaring factory premises, and obtaining approval for equipment movement. Despite strict compliance, a show cause notice was issued alleging illegitimate activities without concrete evidence, leading to the petitioner's writ petition. The respondents admitted the removal of goods with department consent and denied any excess clearance, supporting the petitioner's compliance stance.

Issue 2: Challenge to Show Cause Notice and Legal Provisions
The High Court considered the challenge to the show cause notice, emphasizing the petitioner's adherence to relevant rules and lack of irregularities. The petitioner argued that if the notice did not comply with statutory provisions, the Court could intervene even at this stage. The Court noted the petitioner's compliance and the absence of clandestine removal, rendering Rule 9(2) inapplicable. The Court cited a relevant Supreme Court decision and found the notice time-barred due to the incongruity of clandestine removal allegations in a unit under physical control of the Excise Department.

Conclusion:
The Court upheld the petitioner's objection, ruling in favor of the petitioner and allowing the Writ Petition, without imposing any costs. The judgment emphasized the importance of compliance with statutory provisions and the inapplicability of certain rules in cases where removal was with department consent, setting a precedent for similar cases.