1987 (12) TMI 192 - AT - Central Excise

Summary

Issues Involved:
1. Adducing additional grounds.
2. Stay of proceedings.
3. Jurisdiction of the Collector to issue Show Cause Notice.
4. Validity of the Show Cause Notice based on limitation and suppression.

Summary:

1. Adducing Additional Grounds:
The petition filed to adduce additional grounds was allowed.

2. Stay of Proceedings:
The petition seeking a stay of proceedings before the Collector was dismissed as the appeal against the Collector's order was taken up for disposal on merits.

3. Jurisdiction of the Collector to Issue Show Cause Notice:
The appeal was directed against the order dated 24-4-1987 by the Collector of Central Excise, Madurai, which held that the Collector had jurisdiction to issue the Show Cause Notice demanding duty from the appellants for the period March 1979 to May 1981, and the same was not hit by limitation.

- The appellants contended that the Show Cause Notice for the period 1-3-1979 to 31-5-1981 was previously addressed by the Superintendent of Central Excise, Tiruchendur Range, and settled by the Assistant Collector's letter dated 3-2-1982. They argued that this letter constituted an adjudication order, thus barring the Collector from issuing a new Show Cause Notice for the same period.

- The respondents argued that the second Show Cause Notice issued on 12-5-1983 alleged new grounds of suppression and mis-statement not addressed in the first Show Cause Notice, justifying a new adjudication by the Collector.

4. Validity of the Show Cause Notice Based on Limitation and Suppression:
The appellants argued that the second Show Cause Notice was barred by constructive res judicata and that the Collector had no jurisdiction to issue it under Section 11A as the "Proper Officer" was the Assistant Collector. They also contended that the Show Cause Notice was invalid as it was not signed by the Collector personally.

- The respondents countered that the second Show Cause Notice detailed new grounds of suppression and mis-statement, which were not part of the first Show Cause Notice. They also argued that the Collector had the authority to issue the Show Cause Notice under Rule 6 of the Central Excise Rules and that the amendment to Section 11A effective from 27-12-1985 empowered the Collector to issue such notices.

- The Tribunal held that the Assistant Collector's letter dated 3-2-1982 had certain attributes of a decision but the second Show Cause Notice disclosed new material justifying a fresh adjudication by the Collector. It was also held that the Collector had jurisdiction to issue the Show Cause Notice under Rule 6 of the Central Excise Rules, even prior to the amendment of Section 11A.

- The Tribunal further noted that the amendment to Section 11A in December 1985 clarified the Collector's authority to issue Show Cause Notices for longer periods and that the pending proceedings were deemed to be transferred to the Collector.

Conclusion:
The Tribunal concluded that the Collector of Central Excise, Madurai, had jurisdiction to issue the Show Cause Notice dated 12-5-1983. The appeal was disposed of, allowing the appellants to pursue their case before the Collector as per the law.