1991 (5) TMI 143 - AT - Central Excise

Issues Involved:
1. Validity and legality of the show cause notice issued by the Superintendent of Central Excise.
2. Competence and jurisdiction of the Superintendent to issue the show cause notice post-amendment to Section 11A of the Central Excises and Salt Act, 1944.
3. Effective date of the show cause notice and its impact on the proceedings.

Detailed Analysis:

1. Validity and Legality of the Show Cause Notice:
The appellants challenged the order-in-original dated 4-1-1988 confirming the show cause notice dated 26-12-1985 issued by the Superintendent of Central Excise. The primary contention was the validity of the show cause notice in light of the amendment to Section 11A of the Central Excises and Salt Act, 1944, which required that such notices be issued by the Collector if the extended period of five years is invoked.

2. Competence and Jurisdiction of the Superintendent Post-Amendment:
The amendment to Section 11A came into effect on 27-12-1985, which mandated that the Collector of Central Excise, not the Superintendent, issue show cause notices for the extended period. The appellants argued that since the notice was issued by the Superintendent after the amendment, it was invalid. The Department contended that the notice was signed on 26-12-1985 before the amendment took effect, thus maintaining its validity.

3. Effective Date of the Show Cause Notice:
The Tribunal concluded that the effective date of the show cause notice is when it is served to the party, not when it is signed or despatched. The notice was despatched on 27-12-1985, the same day the amendment came into effect, rendering the Superintendent incompetent to issue it. The Tribunal referenced the Supreme Court's ruling in K. Narasimhiah v. H.C. Singri Gowda & Others, which stated that the giving of notice is complete only when it reaches the hands of the person to whom it is given.

Judgment Summary:
The Tribunal held that the preliminary objection raised by the appellants was valid. The show cause notice, although signed on 26-12-1985, was despatched and reached the appellants after the amendment came into effect on 27-12-1985. As per the amended Section 11A, the Superintendent no longer had the jurisdiction to issue the notice. Consequently, the notice was deemed a nullity and the proceedings arising from it were void ab initio. The ruling of the Gujarat High Court in Gujarat State Fertilizer Co. Ltd. & Another v. Union of India & Others supported this conclusion, emphasizing that only the Collector of Central Excise could issue such notices post-amendment.

Separate Judgment:
The President concurred with the conclusion but provided additional reasoning. He highlighted that the requirement under Section 11A is that the competent officer must serve the notice. Since the Superintendent had no jurisdiction on the date of service, the notice was invalid. The President also referenced the Tribunal's decision in Collector of Customs and Central Excise, Rajkot v. Cotton Corporation of India and Others, which dealt with a similar issue of jurisdiction and competence post-amendment.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, declaring the show cause notice invalid due to the lack of jurisdiction of the Superintendent post-amendment to Section 11A of the Central Excises and Salt Act, 1944.

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