1991 (3) TMI 165 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the show cause notice issued by the Deputy Collector.
2. Time-barred demand under Section 11A of the Central Excises and Salt Act.
3. Jurisdiction of the Deputy Collector for confiscation and imposition of penalty.

Summary:

Issue 1: Validity of the Show Cause Notice
The appellants contested the show cause notice dated 6-3-1986 issued by the Deputy Collector, arguing it was without jurisdiction as per the amendment effective from 27-12-1985 to Section 11A of the Central Excises and Salt Act. The proviso to Section 11A mandates that only the Collector can issue notices for demands involving fraud, collusion, or suppression of facts for a period extending up to five years. The Tribunal upheld this contention, stating the notice issued by the Deputy Collector was patently illegal and in contravention of Section 11A. The Tribunal referred to the Gujarat High Court's decision in Gujarat State Fertilizer Co. Ltd. v. UOI and the Tribunal's own decision in M/s. Pratap Rajasthan Copper Foils & Laminates Ltd. v. CCE, Jaipur.

Issue 2: Time-barred Demand
The Tribunal found that the demand for the period exceeding six months from the relevant date was time-barred as the show cause notice was issued by an unauthorized officer. The Tribunal noted that the appellants had raised the issue of jurisdiction in their interim reply dated 17-11-1988 and during adjudication proceedings, thus timely challenging the notice's legality. The Tribunal rejected the argument that the notice could be valid for six months, emphasizing that statutory requirements cannot be circumvented.

Issue 3: Jurisdiction for Confiscation and Penalty
The Tribunal also addressed the jurisdiction for confiscation and penalty. The majority opinion held that the show cause notice was without jurisdiction for all purposes, including confiscation and penalty, as these proceedings are inherently linked to the demand for duty. The Tribunal referred to the Supreme Court's observations in Commissioner of Sales Tax v. Sarjoo Prasad and Dayalal v. State Transport Authority, emphasizing that jurisdictional objections go to the root of the case and cannot be waived or conferred by consent.

Final Order:
The Tribunal allowed the appeal on the ground that the show cause notice was without jurisdiction and set aside the impugned order with consequential relief to the appellants. The Tribunal did not enter into the merits of the case due to the jurisdictional defect in the notice.