1988 (6) TMI 197 - AT - Central Excise

Summary

Issues:
1. Demand of differential duty on grounds of under-filling of matches.
2. Validity of the show cause notice and jurisdiction of the Superintendent of Central Excise.
3. Applicability of Rule 63 and Notification 22/82.
4. Competency of the Superintendent to issue show cause notice and adjudicate on short levy.

Detailed Analysis:
1. The appeal challenged an order confirming a demand for a differential duty of Rs. 4,736.80 due to under-filling of matches in bundles. The appellant, a match manufacturer, was found to have under-filled boxes of one brand. The Superintendent of Central Excise issued a show cause notice demanding the differential duty and penalty. The lower appellate authority confirmed the duty but dropped the penalty. The appeal questioned the legality of the show cause notice and jurisdiction of the Superintendent in adjudicating the matter.

2. The appellant argued that being a middle sector unit, it was not entitled to concessional benefits under Notification 22/82, making the reference to it in the show cause notice irrelevant. The appellant contended that Rule 63, cited in the notice, only pertains to the number of sticks in a box and does not justify a duty demand. The appellant also raised concerns about the lack of relevant data provided before the original authority's decision, alleging a violation of natural justice principles.

3. The Departmental Representative acknowledged that Rule 63 and Notification 22/82 were not relevant to the case, a point also accepted in the impugned order. However, the Representative argued that the Superintendent had the authority to issue the show cause notice and that breaching Rule 63 could lead to both penalties and differential duty liability.

4. The judgment analyzed the legal provisions regarding short levy under Section 11A of the Act, which vests adjudication powers with the Assistant Collector or the Collector. It highlighted that the Superintendent lacked jurisdiction to determine duty liability for short levy, as per the Act. The judgment emphasized the necessity of a valid delegation of power for such adjudication, which was absent in this case. Consequently, the original authority's order was deemed incompetent and without jurisdiction, leading to the setting aside of the impugned order.

5. The judgment concluded by overturning the original authority's decision, as it lacked jurisdiction, and suggested that the Assistant Collector could reassess the matter lawfully. The appellant was granted the opportunity to present legal arguments in any future adjudication.