1998 (11) TMI 317 - AT - Central Excise

Summary

Issues:
Jurisdiction of issuing show cause notice invoking extended period of limitation by Asstt. Collector of Central Excise, validity of multiple show cause notices, merger of show cause notices, proper adjudication procedure by Addl. Collector of Central Excise.

Jurisdiction of Issuing Show Cause Notice:
The appeal challenged the Order-in Original dated 23-9-1991 passed by the Addl. Collector of Central Excise, Indore. A show cause notice was initially issued on 13-8-1986 by the Asstt. Collector of Central Excise for the years 1982-83, 1983-84, and 1984-85, demanding central excise duty. The extended period of limitation was invoked, which was contested by the appellants. The Collector of Central Excise (Appeals) remanded the matter, agreeing that post-23-12-1985, show cause notices for the extended period should be issued by the Collector of Central Excise. The subsequent show cause notice was issued on 17-1-1990 by the Addl. Collector of Central Excise, leading to a demand confirmation for 1984-85 and a penalty imposition.

Validity of Multiple Show Cause Notices and Merger:
During the hearing, the appellants argued that the original show cause notice was beyond the jurisdiction of the Asstt. Collector of Central Excise to invoke the extended period of limitation. They contended that the subsequent show cause notice was also time-barred and there could be no merger of the two notices. The appellants emphasized their compliance with price disclosures and exemptions under relevant notifications. In response, the JDR argued that the demand confirmed for 1984-85 was within the limitation period when calculated from the first show cause notice, asserting a merger of the two notices.

Proper Adjudication Procedure by Addl. Collector of Central Excise:
Upon careful consideration, the Tribunal found that the original show cause notice was issued by the Asstt. Collector of Central Excise beyond his jurisdiction, as per the amended Section 11A of the Central Excises Act, 1944. The subsequent adjudication by the Dy. Collector of Central Excise and the revised show cause notice by the Addl. Collector of Central Excise were deemed improper. The Tribunal emphasized that the infirmity of the initial notice could not be rectified by the adjudicating authority. It was concluded that the Addl. Collector's procedure of adjudicating the matter by considering both show cause notices together was flawed, as the first notice lacked jurisdiction and the second notice could not establish suppression.

In conclusion, the Tribunal held that the demand in question was not sustainable due to procedural irregularities. The impugned Order-in-Original was set aside, and the appeal was allowed with consequential relief to the appellants, if applicable under the law.