1989 (9) TMI 211 - AT - Central Excise

Summary

Issues:
1. Whether the demand notice was barred by limitation.
2. Whether the Superintendent's actions were preceded by a proper show cause notice.
3. Whether goods exempted from excise duty should be excluded from the computation of the duty exemption limit.

Analysis:
1. The demand notice issued on 17-12-1979 for the period August 78 to November 78 was held to be barred by limitation as it was issued beyond the stipulated six-month period. The extended period of limitation was not available to the Revenue in this case, rendering the notice unenforceable.

2. The Superintendent's actions were scrutinized regarding the show cause notice requirement. The Superintendent's letters to the appellants did not constitute a proper show cause notice as mandated by law. The letters only indicated that the issue was under consideration without alleging suppression of fact or any circumstance warranting duty demand beyond the six-month limitation period.

3. The issue of whether goods exempted from excise duty should be excluded from the computation of the duty exemption limit was deliberated. The appellants argued that goods exempted by a Rule 8(1) notification should be excluded from the limit of goods eligible for duty exemption. However, the Tribunal emphasized the necessity of a formal show cause notice before demanding duty, citing various authorities including Supreme Court judgments.

4. The Tribunal referenced legal precedents to establish that demands arising from finalization of Assessment Returns should be preceded by a proper show cause notice and adjudication proceedings. The authorities highlighted the essential requirement of serving a notice and providing an opportunity for representation before creating a demand against an assessee.

5. The Tribunal dismissed the arguments made by the Respondent, emphasizing that the demands raised on Assessment Returns were not accompanied by proper show cause notices and were barred by limitation. The letters issued by the Superintendent did not fulfill the statutory requirements of a show cause notice, rendering the demand unenforceable.

6. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants due to the demand being unenforceable based on the issues of limitation and lack of proper show cause notice. Other contentions raised were not considered due to the appeal's success on the ground of limitation.