2010 (7) TMI 171 - HC - Central Excise

Area based exemption- Jurisdiction to adjudicate validity of certificate. Certificate issued under Notification No. 39/2001-C.E. by committee consisting of principal, secretary, industries and mining department, Gujrat Government and Chief Commissioner of Central Excise, Ahmedabad. Revenue alleging that impugned certificate obtained by misleading department. Certificate having been issued by Committee constituted under the said notification, prima facie, Commissioner of Central Excise Rajkot not having jurisdiction to adjudicates its validity. Committee alone can take appropriate decision. Limitation to be considered during final hearing.

Summary

Issues:
Challenge to show cause notice dated 17.9.2008 regarding completion of plant certificate, erroneous refund, penalty imposition, interest recovery, and imposition of penalty on an individual.

Analysis:
The petition challenges a show cause notice dated 17.9.2008, raising concerns about a certificate granted on 28.7.2003 regarding plant completion, an erroneous refund of Rs.41,53,10,827, penalty under section 11 AC of Central Excise Act, interest recovery under section 11AB, and imposition of penalty under Rule 26 of C.Ex. Rules, 2002 on an individual. The show cause notice questions the validity of the plant completion certificate, alleging it was obtained by misleading departmental officers. The certificate was issued by a committee under Notification No.39/2001, indicating that the Commissioner issuing the notice lacks jurisdiction to adjudicate on its validity, as only the committee can decide on its authenticity.

The respondents argue that the show cause notice falls within the extended limitation period, citing the refund orders as the basis for the notice issuance. The court notes that the notice date is after the certificate date, and the respondents claim it is within the extended limitation period. However, the court emphasizes that the committee responsible for issuing the certificate should decide on its validity, not the Commissioner who issued the notice. The matter of the notice being within the limitation period will be further examined during the final hearing.

As an interim measure, the court stays the show cause notice dated 17.9.2008 until the final disposal of the petition. This stay provides temporary relief pending the final decision on the issues raised in the petition, allowing for a more comprehensive examination of the legal arguments and facts presented. The stay ensures that no immediate actions are taken based on the show cause notice, maintaining the status quo until a final resolution is reached through the legal process.