1996 (9) TMI 262 - AT - Central Excise

Issues Involved:
1. Applicability of Notification No. 35/76 and its successor notifications.
2. Validity and timeliness of the show cause notices issued under Section 11A.
3. Eligibility for concessional rates of duty for sugar under various notifications.
4. Limitation period for issuing show cause notices.

Detailed Analysis:

1. Applicability of Notification No. 35/76 and its Successor Notifications:
The Collector (Appeals) held that all the notifications mentioned were not applicable, and the rate for free sale sugar as it existed at the relevant period was applicable. The Assistant Collector's order that rates under Notification No. 35/76 are applicable was not in pursuance of the earlier show cause notices. The Tribunal observed that Notification No. 210/73 was superseded by subsequent notifications (223/76, 226/76, 251/76), and the proviso to Notification No. 35/76 specifically excluded the benefits of Notification No. 210/73. The Tribunal concluded that the scope of the proviso to Notification No. 35/76 is restricted to Notification No. 210/73 alone and does not extend to its successor notifications.

2. Validity and Timeliness of the Show Cause Notices Issued under Section 11A:
The first show cause notice issued on 25-10-1977 was within the time limit, covering the period July and August 1977. The second show cause notice issued on 12-3-1979 was partly time-barred. The third show cause notice issued on 28-3-1984 was beyond the five-year limitation period and hence invalid. The Tribunal found that the third show cause notice was a fresh notice introducing new grounds and was not merely an addendum, thus it was time-barred.

3. Eligibility for Concessional Rates of Duty for Sugar under Various Notifications:
The respondents availed concessional rates under Notification No. 35/76 from 28-7-1977 to 15-8-1978. The Assistant Collector held that the respondents were eligible for benefits under Notification No. 35/76 but not under other notifications (223/76, 226/76, 251/76, 317/77) during the same period. The Tribunal agreed that the respondents were entitled to the benefits under Notification No. 35/76 as the proviso to this notification did not extend to successor notifications.

4. Limitation Period for Issuing Show Cause Notices:
The Tribunal noted that the second and third show cause notices were issued beyond the permissible limitation period. The second show cause notice covered the period 1-10-1977 to 30-6-1978 and was issued on 12-3-1979, which was beyond six months. The third show cause notice was issued on 28-3-1984, covering the period 28-7-1977 to 15-8-1978, and was beyond five years. The Tribunal held that in the absence of allegations of suppression, fraud, or willful mis-statement, the extended period for issuing show cause notices was not justified.

Conclusion:
The Tribunal set aside the orders of the Assistant Collector and Collector (Appeals) regarding the second and third show cause notices, declaring them time-barred. The Tribunal upheld the applicability of Notification No. 35/76 and ruled that the respondents were entitled to consequential benefits as per the first show cause notice and in accordance with the law.

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