2008 (9) TMI 379 - HC - Central Excise

Limitation - whether the order passed by the Central Government on 30-1-1981 under Section 36 of the Central Excise Act, 1944 was beyond time? Held that - The show cause notice dated 16-10-1978 was beyond the period prescribed under Section 36(2). Consequently, the impugned order dated 30-1-1981 which is the culmination of the proceedings initiated on the basis of the said show cause notice would also be without jurisdiction. The impugned order is liable to be set aside. This conclusion of ours supported by a decision of the case of Rollatainers Limited v. Union of India 1997 (9) TMI 120 - HIGH COURT OF JUDICATURE AT DELHI . W.P. allowed. The impugned order dated 30-1-1981 is set aside.

Summary

Issues involved:
Challenge to the order passed by the Central Government under Section 36 of the Central Excise Act, 1944 as being beyond time.

Analysis:
1. The judgment dealt with a writ petition challenging the order passed by the Central Government under Section 36 of the Central Excise Act, 1944 as being beyond time. The Appellate Collector had passed an order in favor of the petitioner on a certain date, followed by the issuance of a show cause notice. The impugned order was passed after the show cause notice.

2. Section 36 of the Act empowers the Central Government to call for and examine records of proceedings under Sections 35 or 35A to ensure correctness, legality, or propriety of decisions. The provision mandates that no decision prejudicial to any person shall be made after one year from the date of the decision. The Central Government must give notice to show cause before levying or enhancing duty.

3. The judgment highlighted that the show cause notice must be issued within six months of the order under Section 35. The petitioner contended that the show cause notice was time-barred, as it was issued well after the six-month limit specified in Section 11A of the Act. The respondents argued that this plea was an afterthought, but the timing of raising the issue was deemed irrelevant due to the mandatory nature of the requirement.

4. The Court emphasized that the issuance of the show cause notice within the stipulated period was a jurisdictional requirement. As the notice was indeed issued after the six-month period from the date of the order, it was held to be beyond the prescribed time under Section 36(2). Consequently, the impugned order based on the time-barred notice was declared without jurisdiction and set aside.

5. The judgment referenced a prior decision of the Court to support the conclusion reached. The writ petition was allowed, the impugned order was set aside, and the petitioner was entitled to the return of the bank guarantee within a specified timeframe upon application, with no costs imposed.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Court's reasoning in arriving at its decision.