2001 (6) TMI 133 - AT - Central Excise

Summary

Issues:
1. Confirmation of demands without issuing show cause notice under Central Excise Rules.
2. Applicability of waiver of show cause notice procedure in Central Excise Act.
3. Remedies for defects in proceedings due to non-issuance of show cause notice.

Analysis:
1. The appeal questioned the confirmation of demands without the issuance of a show cause notice under the Central Excise Rules. The Counsel contended that demands cannot be confirmed without a show cause notice. The Additional Commissioner's report acknowledged the absence of a show cause notice due to the appellants' waiver. The appellants argued that waiver of show cause notice is not applicable in Central Excise proceedings, citing relevant judgments, including one by the Apex Court. The Tribunal noted that without a show cause notice, demands cannot be confirmed, as established in previous Supreme Court judgments and Tribunal cases.

2. The issue of whether the waiver of show cause notice procedure applies in Central Excise Act proceedings was debated. The appellants emphasized that show cause notice is mandatory for confirming demands under the Act, and waiver does not absolve the Department of its duty to issue such notice. The Tribunal agreed with the appellants, citing settled law and previous judgments. The Tribunal emphasized the fundamental requirement of issuing a show cause notice for raising demands under the Central Excise Act, stating that failure to do so renders proceedings unsustainable.

3. Regarding potential remedies for defects arising from the non-issuance of a show cause notice, the ld. DR suggested remanding the matter to rectify the defects. However, the appellants argued that similar proceedings had been set aside by the Tribunal due to the incurable lacuna of not issuing a show cause notice. The Tribunal concurred with the appellants, emphasizing that the absence of a show cause notice is a fundamental error that renders proceedings unsustainable. The Tribunal concluded that the appellants succeeded on the preliminary point raised, setting aside the impugned order and allowing the appeal with consequential relief, if any.