1994 (9) TMI 198 - AT - Central Excise

Summary

Issues:
1. Jurisdiction of the officers to issue a show cause notice for duty demand and penalty.
2. Validity of the notice issued under Section 11A of the Central Excises and Salt Act.
3. Adjudication of duty demand and penalty based on the notice served by the Superintendent.

Analysis:

Issue 1:
The appeal challenged the order confirming duty demand and penalty due to alleged clandestine removal of goods without appropriate duty payment. The officers found discrepancies in the factory premises, leading to a show cause notice (SCN) and subsequent adjudication by the Assistant Collector and Collector (A).

Issue 2:
The appellant's advocate argued that the SCN issued on 16-7-1986 was beyond the six-month limit from the actual clandestine removal, as the amended Section 11A vested extended period invocation power only in the Collector. The advocate contended that the notice was in contravention of statutory provisions, thereby vitiating the adjudication proceedings.

Issue 3:
The JDR supported the order, asserting that the detection date of 5-2-1986 marked the start of the six-month limitation period for issuing the SCN. However, the Tribunal noted that the amended Section 11A limited the power to invoke the extended period to the Collector. The SCN did not specify the timeframe of the alleged clandestine removal, leading to a conclusion that the notice served by the Superintendent was illegal and void concerning the duty demand.

The Tribunal acknowledged the appellant's negligence in maintaining proper accounts but upheld the reduced penalty of Rs. 250 imposed by the Collector (A). Consequently, the appeal was partly allowed, setting aside the duty demand while confirming the penalty.