2006 (9) TMI 189 - HC - Central Excise

Summary

Issues involved:
1. Competency of Additional Commissioner to issue show cause notice and adjudicate under Section 11A of the Central Excise Act, 1944 post the amendment by Act No. 18 of 1992.
2. Maintainability of the application under Section 35H for reference to the High Court.
3. Interpretation of CBEC circular No. 3/92-CX.6 dated 14-5-1992 regarding the authority to issue notice and adjudicate in cases involving fraud, suppression of facts, etc. post the amendment.

Detailed Analysis:
1. The judgment revolves around the issue of whether the Additional Commissioner had the jurisdiction to issue show cause notices and adjudicate under Section 11A of the Central Excise Act, 1944 after the amendment by Act No. 18 of 1992. The Tribunal concluded that the Additional Commissioner lacked jurisdiction based on past circulars and legal precedents. The Court highlighted the differences in the language of the amended Section 11A(1) post the 1992 amendment, emphasizing the need to determine if the Additional Commissioner retained the power to issue notices and adjudicate in cases involving duty evasion due to fraud, collusion, or misstatements. The Court directed the Appellate Tribunal to refer this question of law to the High Court under Section 35H for further clarification.

2. The maintainability of the application under Section 35H for reference to the High Court was challenged by the respondent, arguing that the issue did not pertain to the rate of excise duty or the value of goods for assessment, which would warrant an appeal to the Supreme Court under Section 35L instead. However, the Court dismissed this objection, noting that the Tribunal's decision solely concerned the jurisdiction of the Additional Commissioner and did not relate to excise duty rates or goods' valuation. Therefore, the application for reference under Section 35H was deemed appropriate.

3. The interpretation of CBEC circular No. 3/92-CX.6 dated 14-5-1992 played a crucial role in the judgment regarding the authority to issue notices and adjudicate in cases involving fraud, suppression of facts, etc. The Court acknowledged the instructions provided in the circular, which indicated that the Collector of Central Excise would handle cases with allegations of fraud or suppression of facts, even after the 1992 amendment. The Court highlighted the need to determine whether, post-amendment, only the Commissioner of Central Excise or also the Additional Commissioner had the power to issue notices and adjudicate in such cases. This unresolved legal question prompted the Court to direct the Appellate Tribunal to refer the matter to the High Court for clarification under Section 35H.