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TMI Blog2008 (4) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest in the business of each other. Therefore, they would be covered by Proviso (ii) of Section 4(1)(a) of the Central Excise and Salt Act, 1944 (the Act). Hence, the appellate authority set aside the order made by the adjudicating authority and held that the price charged by the buyer company to the customers of the buyer company shall be treated as the assessable value of the goods manufactured and sold by the petitioner-appellant and the petitioner-appellant was to be charged excise duty accordingly. 3. On behalf of the petitioner-appellant it is submitted that the entire order made by the appellate authority is without jurisdiction as the appellate authority has travelled beyond the subject matter of the appeal by holding that the petitioner-appellant and the buyer company are related persons. It is submitted that originally a show cause notice was issued by the adjudicating authority on the ground that the petitioner-Company and the buyer company are related. The show cause notice came to be challenged by the petitioner by way of Special Civil Application No.5922 of 1986 which came to be disposed of vide order dated 09.04.1987 whereunder the petitioner was directed to repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Jamshedpur & Ors. 2008 (221) E.L.T. 163 (S.C.) = 2008 (3) SCC 70 was referred to in context of the period of limitation. 6. On behalf of the respondent-department Mr. H.C. Buch, learned Additional Standing Counsel for the Central Government, submitted that Second Proviso under sub-section (3) of Section 35A of the Act had to be read so as to make the provisions workable. That the petitioner-appellant had already been issued a show cause notice by the adjudicating authority and hence, it was not as if the order had been made by the appellate authority without any notice to the petitioner-Company. Alternatively, it was pleaded that if it was required that it should be the appellate authority who should issue notice the impugned order could be set aside and the appeal restored to the file of the appellate authority for issuing a show cause notice as required by the provisions. A further alternative contention was raised to the effect that the impugned order itself could be treated as a show cause notice required by provisions of the Second Proviso to sub-section (3) of Section 35A of the Act and this would ensure that there would be no issue of limitation considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the proposed order: Provided further that where the Collector (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in section 11A to show cause against the proposed order. (4) The order of the Collector (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. (5) On the disposal of the appeal, the Collector (Appeals) shall communicate the order passed by him to the appellant, the adjudicating authority and the Collector of Central Excise." Sub-section (3) of Section 35A of the Act specifically empowers the appellate authority to pass such order as the appellate authority thinks fit confirming, modifying or annulling the decision or order appealed against, if necessary, after making such further inquiry as may be required. The First Proviso under the said sub-section permits enhancement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order made by the adjudicating authority and such an appellant need not necessarily be only an assessee against whom an adjudication order has been made. [Reference: Lalbhai Trading Company through B.K. Bhatt & Ors. v. Union of India & Ors., 2006(1) G.L.R. 497.] Therefore, also, the show cause notice issued by the adjudicating authority cannot take place of the show cause notice to be issued by the appellate authority. 10. After recording an opinion the appellate authority is required to issue a notice to the appellant to show cause against the proposed order. The said words, "the proposed order" indicate the legislative intention, namely, the recording of opinion is not an idle formality. It is not merely a formation of opinion, but the notice has to contain the basis, the material, the reasons for forming of such an opinion. In the present case admittedly no notice was ever issued by the appellate authority. Thus the conditions precedent for assumption of jurisdiction and exercise of powers under the Second Proviso to sub-section (3) of Section 35A of the Act are not shown to have been fulfilled. 11. Admittedly, the maximum period of limitation under Section 11A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. ....." 13. In the circumstances, it would not be just and proper to extend the period of limitation after a period of nearly two decades because the appellate authority is bound to be well versed with the provisions of the Act, more particularly the provisions which relate to procedure in appeal which an appellate authority is required to statutorily comply with. If the appellate authority has failed to comply with the requisite statutory provisions and show from the record satisfaction of the prerequisite conditions for exercise of jurisdiction to enhance the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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