1990 (1) TMI 168 - AT - Central Excise

Summary

Issues:
1. Competency of the Additional Collector to adjudicate on the show cause notice issued by the Supdt.
2. Enforceability of the demand based on the show cause notices issued by the Additional Collector.
3. Interpretation of the judgment of the Gujarat High Court in GSFC case.
4. Application of the extended period of limitation for invoking demand.

The judgment pertains to an appeal against the order of the Additional Collector of Central Excise & Customs confirming a demand against the appellants for a specific period. The show cause notices issued by the Supdt. and the Additional Collector are analyzed. The show cause notice by the Supdt. did not allege suppression or fraud but traversed beyond six months. The Additional Collector's notice, issued in compliance with a Gujarat High Court judgment, alleged suppression and fraud. The Additional Collector's order sought to give effect to the Supdt.'s notice but concluded that the extended period was not applicable due to no suppression or fraud found.

The appellant's advocate argued that the Additional Collector's order was incorrect as the notice issued by the Supdt. had been replaced by the Additional Collector's notice, which alleged suppression and fraud. The advocate referenced the Gujarat High Court judgment, which deemed notices exceeding six months as illegal. The advocate contended that the demand based on the second notice could only cover six months from its issuance date, which fell beyond the period due to the absence of suppression or fraud.

The department's representative argued that the Additional Collector's notice was valid and not nullified by the subsequent notice. He maintained that the Supdt.'s notice could be enforced for a period of six months. The main issue revolved around whether the Additional Collector had the authority to adjudicate on the Supdt.'s notice for demanding duty within six months from its issuance. The Tribunal observed that the Additional Collector had superseded the Supdt.'s notice by issuing his own notice, alleging fraud and suppression, and therefore, the demand based on the Supdt.'s notice was deemed illegal and unsustainable.

The Tribunal held that the Additional Collector's attempt to enforce the demand limited to a period of six months from the Supdt.'s notice issuance date, which was replaced by another notice, was illegal. The Tribunal accepted the appellant's argument and allowed the appeal, ruling in favor of the appellants.