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2004 (6) TMI 54 - AT - Central ExciseDemand - Legality of show cause notices issued during the pendency of provisional assessments - HELD THAT - We are in full agreement with the well considered view taken by the Chennai Bench in ITC Ltd. v. CCE 2000 (1) TMI 744 - CEGAT, CHENNAI . No other binding decision has been brought to our notice by the Revenue which would persuade us to take a different view. Therefore we have to consider the prayers in each appeal in the light of the ratio of the decision of Chennai Bench in ITC Ltd. v. CCE, Delhi 2003 (3) TMI 119 - SC ORDER . We hold that Order No. 8/99 cannot be sustained as it was passed pursuant to the direction contained in Order No. 6/96. The Jurisdictional Assistant Commissioner will finalise the provisional assessment expeditiously. The Revenue can utilise any material contained in the impugned notice as independent material to support the finalisation of assessment after making the material available to the assessee in writing and after considering their response thereto both in writing and on personal hearing. The revenue shall be at liberty to examine the issue of any short levy, non levy and consequent penal liability only after finalisation of the assessment as per law. We allow Appeals E/l793/96, E/1794/96 and E/3610/2000 as above. The Tribunal allowed the appeals filed by the assessees and dismissed the appeal filed by the Revenue, setting aside the show cause notices and the orders passed pursuant to them. The Jurisdictional Assistant Commissioner was directed to finalize the provisional assessments expeditiously, and the Revenue was allowed to examine any short levy, non-levy, and consequent penal liability only after the finalization of the assessments.
Issues Involved:
1. Legality of show cause notices issued during the pendency of provisional assessments. 2. Authority of the Commissioner of Central Excise to proceed with show cause notices after finalization of provisional assessments. Summary: Issue 1: Legality of Show Cause Notices Issued During Pendency of Provisional Assessments The main issue was whether the show cause notices issued during the pendency of provisional assessments were valid. The Tribunal referred to the decision of the South Zonal Bench, Chennai in ITC Ltd. v. CCE, Delhi - 2002 (146) E.L.T. 336, which upheld the contention that such notices were invalid. The Tribunal noted that the show cause notices were issued prematurely and without authority of law. It relied on several precedents, including UOI v. Godrej & Boyce Manufacturing Co. Pvt. Ltd., Serai Kella Glass Works Pvt. Ltd. v. CCE, and Nayek Paper Industries Pvt. Ltd. v. UOI, which held that no show cause notice u/s 11A could be issued until the provisional assessments were finalized. Issue 2: Authority of Commissioner to Proceed with Show Cause Notices Post Finalization The Tribunal also considered whether the Commissioner of Central Excise, Delhi could retain the power to proceed with the show cause notices even after the finalization of provisional assessments by the Jurisdictional Assistant Commissioner. It was held that the Commissioner could not proceed with the adjudication based on the show cause notices issued during the provisional assessment period. The Tribunal set aside the show cause notices and the orders passed pursuant to them, directing that the Jurisdictional Assistant Commissioner finalize the provisional assessments expeditiously. The Revenue was allowed to examine any short levy, non-levy, and consequent penal liability only after the finalization of the assessments. Appeals E/1795/96, E/1791/96, E/1792/96, E/2760/2001, E/2761/2001, E/2762/2001 These appeals challenged the orders based on show cause notices issued before the finalization of provisional assessments. The Tribunal set aside the show cause notices and the orders passed pursuant to them, directing the Jurisdictional Assistant Commissioner to finalize the provisional assessments expeditiously. Appeals E/1793/96, E/1794/96, E/3610/2000 These appeals challenged Order No. 6/96 and subsequent Order No. 8/99, which were based on show cause notices issued before the finalization of provisional assessments. The Tribunal set aside the show cause notices and the orders passed pursuant to them, directing the Jurisdictional Assistant Commissioner to finalize the provisional assessments expeditiously. Appeal E/3083/2002-A This appeal challenged the order dated 31-7-2002 passed by the Commissioner (Appeals), which was based on Order Nos. 5/96 and 6/96. Since these orders were set aside, the Tribunal also set aside the order dated 31-7-2002. Conclusion The Tribunal allowed the appeals filed by the assessees and dismissed the appeal filed by the Revenue, setting aside the show cause notices and the orders passed pursuant to them. The Jurisdictional Assistant Commissioner was directed to finalize the provisional assessments expeditiously, and the Revenue was allowed to examine any short levy, non-levy, and consequent penal liability only after the finalization of the assessments.
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