1989 (11) TMI 186 - AT - Central Excise

Summary

Issues:
1. Validity of the demand-cum-show cause notice issued by the Superintendent of Central Excise.
2. Jurisdiction of the Superintendent of Central Excise to raise a demand after the order of the Assistant Collector was set aside.
3. Interpretation of the Government of India's clarification regarding the issuance of show cause notices for disallowing Modvat credit.
4. Competency of the Superintendent of Central Excise to issue show cause notices and demands for disallowing Modvat credit under Rule 571(1) of the Central Excise Rules.

Analysis:
1. The appeal challenged the order of the Collector of Central Excise (Appeals) setting aside the Assistant Collector's order confirming a demand for reversing Modvat credit. The Collector held that the Assistant Collector's order lacked a proper show cause notice, citing a judgment from the Madhya Pradesh High Court. The Collector found the notice-cum-demand by the Superintendent of Central Excise inadequate, leading to the reversal of the Assistant Collector's decision.

2. The appellant contended that the initial demand-cum-show cause notice by the Superintendent was without jurisdiction, and the subsequent demand post the appellate authority's decision was unwarranted. The appellant relied on a Government of India letter clarifying the necessity of show cause notices for disallowing Modvat credit, emphasizing that the Assistant Collector was the competent officer for such matters.

3. The Government's clarification highlighted the mandatory nature of show cause notices for disallowing Modvat credit under Rule 571(1). The appellant argued that the Superintendent's notice lacked jurisdiction from the outset, as per the Government's directive. The appellant asserted that the void nature of an order could be challenged even in collateral proceedings.

4. The Department contended that the Superintendent had the authority to issue show cause notices and demands for disallowing Modvat credit. However, the Tribunal noted that the lower appellate authority's observation regarding the Superintendent's order was irrelevant since it was not the subject of appeal. Consequently, the Tribunal expunged the observation and allowed the appeal to that extent, indicating the Superintendent's order was not under consideration in the appeal.

This detailed analysis addresses the issues surrounding the validity of the demand notices, jurisdiction of the authorities, interpretation of relevant directives, and the competency of the Superintendent in issuing such notices, as discussed in the legal judgment before the Appellate Tribunal CEGAT, Madras.