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TMI Blog1996 (4) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... gs were initiated against the appellants by issue of show cause notice by the Superintendent of Central Excise asking the respondents to show cause to the AC as to why Modvat Credit taken in respect of the enumerated gate passes should not be denied. The Assistant Commissioner held against the respondents and disallowed the Modvat credit for the reasons set out in his order. The respondents took up the matter in appeal before the CCE (Appeals), and made various pleas and one of the pleas urged by them was denial of principles of Natural justice as they had also contested before the CCE (Appeals) that show cause notice issued by the Superintendent was incompetent as Superintendent was not the proper officer under Section 57-I to issue show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific declaration, the department is correct in denying the Modvat. Nevertheless, been as the appellant fails to succeed on merits as I have already observed, the order of the lower authority suffers from infirmity on the point of jurisdiction. The Superintendent having passed an order on R.G. 23A Part I and II returns (credit disallowed), the matter reaches finality. The issue of show cause notice and decision thereof in the matter by the Asst. Collr. who was not authorised to do so having been carried out without the authority of law, the first show cause notice even though issued within the stipulated period of 6 months under Sec. 11A r/w Rule 57(I), it suffers from the above infirmity on the point of jurisdiction and therefore, legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, in the light of the above, prima facie, suppression cannot be attributed on the part of the appellant to invoke the provisions of Section 11A. The Supreme Court in the now well known case of Chemphar Drugs Liniments has also held that in order to make the demand under Section 11A of the Central Excises and Salt Act, 1944 for the period beyond 6 months and upto a period of 5 years, something posi- tive, other than mere inaction or failure on the part of the manufacturer, or procedure, or conscious, or deliberate withholding of information when the manufacturer know otherwise, is required to be established. In the instant case, the bona fides of the assessee are established as the entire activity was in the knowledge of the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the original show cause notice and not a fresh show cause notice. In this view of the matter he pleaded that the learned CCE (Appeals) was in error in holding that by the show cause notice issued by the AC a fresh cause of action had arisen and since the show cause notice was issued beyond the period of six months the same was barred by limitation. He pleaded that in the circumstances, he was required to go by original show cause notice and decide the matter based on the show cause notice issued by the Superintendent. 4. Shri Lakshminarayanan, the learned Counsel for the respondents took us through the second show cause notice and the adjudication order passed by the CCE (Appeals). He pleaded that the Superintendent had already en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Narain Alias Lalji Agarwal v. CCE. (3) 1994 (70) E.L.T. 446 in the case of S. Subramanyan Co. v. CCE, Vadodara. (4) 1989 (43) E.L.T. 130 in the case of Indian Textile Engineers v. CCE Customs He stressed that the Courts and Tribunals in the cases cited (supra) have held that there is no reason to issue second show cause notice. He pleaded that in this view, there is no force in the plea of the revenue and their appeal may be dismissed. 5. We have considered the pleas made by both the sides. It is not disputed that the proceedings were initiated by issue of a show cause notice by the Superintendent under Rule 57-I of the Central Excise Rules asking the respondents to show cause to the AC. It is these proceedings in appeal which c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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