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TMI Blog1988 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... arn manufactured by them showing the same as covered by Item No. 18(III)(i) in the First Schedule to the Central Excises and Salt Act, 1944 (referred to hereinafter as the "Central Excises Act"). The said Schedule is generally referred to as the "Central Excises Tariff". This classification was on the basis that the spun yarn was manufactured by them out of non-cellulosic synthetic waste. The said classification list was approved by the excise authorities on 7th July, 1983. A supplementary classification list was approved on 15th October, 1983. The petitioners were clearing the goods on the basis of aforesaid classification lists. It appears that samples were drawn out of the spun yarn manufactured by the petitioners and sent for chemical examination. There are some reports submitted by the Chemical Analyser, with the details of which we are not concerned. Without giving any show cause notice or affording any opportunity to the petitioners to be heard, or 7th February, 1984, the Superintendent of Central Excise issued a notice of demand for a total sum of Rs. 26,47,749.39 against the petitioner No. 1 on the footing that there was short payment of excise duty. This was done on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the writ petition was allowed to the extent that the demand for recovery of Rs. 26,47,749.39 for the period 15th August, 1983 to 6th February, 1984, which was the period referred to in the demand notice was quashed. However, the learned Judge directed the Collector, Central Excise before whom the appeal filed by the petitioners was pending to decide the appeal in respect of the demand made by the excise authorities for the subsequent period. Giani, J., the other learned judge, in his concurring judgment set aside the two orders issued by the Assistant Collector, Central Excise, Ujjain Division both, dated 5th March, 1984 as set out earlier. Copies of these adjudication orders are at Annexures R/10 and R/11 respectively to the writ petition. Very shortly put, both the Judges held that the notice of demand and the orders modifying the classification list served on the petitioners were bad in law and ordered that the same be quashed. A perusal of the judgment also clearly indicates that the Division Bench directed that the Collector, Central Excise (Appeal) should hear the appeal of the petitioners on merits after giving the petitioners an adequate opportunity to put their case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case that no such notice was served. It would thus appear that the aforesaid demand notice, dated 7th February, 1984 was in violation of the provisions of Section 11A and is bad in law. Mr. Govind Das, learned counsel for the appellant, however, contended that although the aforesaid section provides that no demand could be made against a person thereunder without affording that person an adequate opportunity to show cause against the same, in the present case, though no prior show cause notice was given and the petitioners were not given an opportunity to be heard before the notice of demand was issued, such a notice was issued and an opportunity to show cause was given after the demand was made and the demand confirmed after hearing and hence it must be regarded as valid. It was submitted by him that a post facto show cause notice should be regarded as adequate in law. In support of this contention Mr. Govind Das tried to place reliance on certain decisions where a view has been taken that in cases where urgent and emergent action is required, an opportunity to be heard can be given after the order affecting a person adversely is passed and that where a particular Act do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h February, 1984 should be treated as a valid and effective notice in respect of the period from 15th August, 1983 to 6th February, 1984 as well as the period from 7th February, 1984 onwards. In this connection, it is the submission of Dr. Chitale that this notice merely asked the petitioners to show cause against calculation or determination of the amount of short-levy and not against the alteration in the classification lists on the basis of which short-levy was alleged and hence, in respect of the said period from 15th August, 1983 to 6th February, 1984 the show cause notice is liable to be struck down. In our view the submission of Dr. Chitale deserves to be accepted. The opening paragraph of the show cause notice refers to the service of notice of demand, dated 7th February, 1984 for Rs. 26,47,749.39 on the petitioner. Paragraphs 2 and 3 of the said notice run as follows :- "AND whereas the Assistant Collector Central Excise, Ujjain under his letter C.N. V(18)I/1/83/1371-1374, dated 9th February, 1984 has modified approval of the classification lists of the party and has directed that the short levied should be quantified by the Inspector, Central Excise. Biaora/Superintenden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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