1998 (2) TMI 192 - AT - Central Excise

Issues:
1. Validity of the search and seizure under the Gold Control Act, 1968.
2. Legality of the show cause notice (SCN) issued to the applicant.
3. Compliance with the period of limitation for issuing the SCN.
4. Consideration of extension of time for issuing the SCN.
5. Review of the orders passed by lower authorities in light of the limitation issue.

Analysis:

1. The Revision Application was filed against an order confiscating primary gold and imposing a penalty on the applicant under the Gold Control Act, 1968. The search and seizure of gold from the applicant's premises led to the issuance of a show cause notice (SCN) challenging the legality of the search. The matter escalated through various authorities, including the Gold Control Administrator and the Special Secretary, Government of India, before being brought to the Hon'ble Allahabad High Court through a Writ Petition.

2. The core issue revolved around the legality of the SCN issued to the applicant. The applicant contended that the SCN was issued beyond the period of six months as mandated by Section 79 of the Gold Control Act, 1968. The applicant argued that the notice was served after the expiration of the limitation period, rendering it unauthorized and illegal. The High Court's order highlighted the importance of complying with the statutory limitation period for issuing notices under the Act.

3. The applicant's counsel argued that the six-month period for issuing the SCN expired on a specific date, and the notice was served after this date, making it time-barred. The High Court emphasized that a plea of limitation is fundamental and goes to the root of the matter, rendering any confiscation order invalid if the notice is not issued within the prescribed period.

4. The Collector's claim of obtaining necessary sanction for extending the limitation period for issuing the SCN was disputed. Despite multiple adjournments and opportunities, the Department failed to produce evidence supporting the Collector's claim. The Tribunal concluded that there was no material to prove the validity of the extension, rendering the SCN time-barred and invalid in the eyes of the law.

5. The Tribunal, considering the directions of the High Court, held that the SCN issued to the applicant was beyond the period of limitation as per Section 79 of the Gold Control Act, 1968. Consequently, all proceedings stemming from the invalid notice, including the order of confiscation and penalty, were deemed unlawful. The applicant was entitled to the return of the seized goods based on the lack of compliance with the statutory limitation period.

6. The Revision Application was disposed of in favor of the applicant, in line with the High Court's directive to reconsider the matter in light of the limitation issue. The Tribunal's decision focused solely on the preliminary ground of limitation, disregarding the merits of the case as the key concern was the validity of the SCN within the prescribed timeframe.

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