1986 (7) TMI 249 - AT - Central Excise

Issues Involved:

1. Whether the show cause notices issued under Section 36(2) of the Central Excises and Salt Act were barred by time.
2. Applicability of the third proviso to Section 36(2) concerning short-levied duty.
3. Legality of the review show cause notice dated 2-5-1980.
4. Legality of the review show cause notice dated 21-8-1980 concerning confiscation and penalty.

Detailed Analysis:

1. Whether the show cause notices issued under Section 36(2) of the Central Excises and Salt Act were barred by time:

The respondents contended that the show cause notices were barred by time under the third proviso to Section 36(2) of the Central Excises and Salt Act. The Department argued that the second proviso to Section 36(2) was applicable, making the notices timely. The Tribunal examined the provisions of Section 36(2) and concluded that the third proviso, which prescribes a shorter limitation period, was applicable to the case concerning short-levied duty.

2. Applicability of the third proviso to Section 36(2) concerning short-levied duty:

The Tribunal noted that the show cause notice dated 19-1-77 demanded a specified amount of Rs. 19,88,245.51p as short-levied duty. The Assistant Collector confirmed part of this demand, and the Appellate Collector set aside the Assistant Collector's order. The review show cause notice dated 2-5-80 aimed to set aside the Appellate Collector's order. The Tribunal found that the third proviso to Section 36(2) was applicable because the Appellate Collector's order dealt with the demand for short-levied duty, making the review notice time-barred.

3. Legality of the review show cause notice dated 2-5-1980:

The Tribunal held that the review show cause notice dated 2-5-80 was barred by limitation under the third proviso to Section 36(2). The Tribunal emphasized that the purpose of the review notice was to set aside the Appellate Collector's order, which had confirmed the short-levied duty demand. Since the review notice was issued beyond the prescribed limitation period, it was deemed time-barred.

4. Legality of the review show cause notice dated 21-8-1980 concerning confiscation and penalty:

The Tribunal examined the review show cause notice dated 21-8-80, which related to the confiscation of goods and the levy of penalties. The original show cause notice was dated 15-6-77, and the Appellate Collector's order was dated 10-10-79. The review notice was issued within one year from the date of the Appellate Collector's order, making it timely concerning confiscation and penalties. The Tribunal held that the review notice was not barred by limitation for these aspects, although it was time-barred concerning the demand for duty.

Conclusion:

The Tribunal concluded that the review show cause notice dated 2-5-80 was barred by limitation and should be discharged. However, the review show cause notice dated 21-8-80 was only time-barred concerning the demand for duty but not for confiscation and penalties. Consequently, Appeal No. 1138/80-D was dismissed, and Appeal No. 1059/80-D was to be heard on merits concerning confiscation and penalties.

← Previous Next →