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TMI Blog1996 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 as amended from time to time read with Notification No. 33/88-C.E., dated 1-3-86. Without considering the matter in depth and without considering the contentions of the petitioners, opposite party No. 1 classified the products of the petitioners under Tariff sub-heading 3402.90 with basic Excise Duty @15% ad valorem and special service duty 5% of the Basic. Feeling aggrieved by the denial of exemption the petitioners preferred an appeal under Section 35 of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act') before the Collector Appeals opposite party No. 3. During the pendency of the appeal opposite party No. 2 issued a demand notice (Annexure-6) directing the petitioners to pay Rs. 5,23,589.40 as differential Duty. As there was non-compliance of the provisions enjoined under Section 11A of the Act and without issuance of notice to show cause, the petitioners preferred another appeal against the aforesaid order of demand passed by Annexure-6 before the appellate authority praying therein for quashment of the impugned demand on the ground that there had been flagrant violation of the mandatory provisions of Section 11A of the Act. Along with the appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand made under Annexure-6 within the stipulated time, notice under Annexure-9 was issued to avoid difficulties for the department to realise the aforesaid amount. It has also been stated that the petitioner having approached the appellate authority against the order passed in Annexure-6, they have to prosecute the appeal by complying with the pre-deposit as directed in Annexure-10 to the writ application. The averments in the petition have also been controverted indicating that though by abundant caution notice to show cause was issued by Annexure-6, the petitioners are liable to pay the amount as it is a final assessment order under Rule 173(1) of the Rules. An additional counter-affidavit has been filed by the opposite parties indicating that as the petitioners did not comply with the conditions imposed under Annexture-10 the appeal filed against the order challenging Annexure-6 has been dismissed and therefore the petitioners' writ application has become infructuous and the petitioners can prosecute their case in the alternative forum. 5.Shri B.S. Tripathy, learned Counsel for the petitioners raises the following contentions :- (a) The demand notice dated 21-5-91 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the demand passed in Annexure-11 contending that the same has been done by abundant caution though there was no necessity for the same. 7.The rival submissions of the learned Counsel for both the sides require careful and anxious consideration. 8.We have perused the demand notice passed by Annexure-6. The said notice reads as follows :- "In pursuance of Assistant Collector, Central Excise and Customs, Sambalpur order dated 1-5-91 wherein classification list was approved and communicated under letter C. No. V (34) 17-VC/11/90-3479, dated 7-5-91, the R.T. 12 from the period February, 1990 to March, 1991 are finalised which were assessed provisionally previously. Accordingly Rs. 5,23,589.40 of differential duty (i.e. B.E.D. Rs. 4,98,656.74 + S.E. Duty Rs. 24,932.66) is due to pay as Central Excise Duty by you. In this respect a detailed calculation sheet is enclosed herewith. Therefore you are requested to pay the differential central excise duty as mentioned above within 15 days on receipt of this letter." No doubt the aforesaid order was challenged in appeal and as indicated earlier the appeal was dismissed for non-compliance of the conditional order of pre-deposit. While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Annexure-11. It is essential to quote the relevant portion from the aforesaid order which is as follows :- "Accordingly a demand-cum-show cause notice was issued by the Superintendent, Central Excise and Customs, Bargarh, vide his letter C. No. FE-13/D/BDE/91/1643-44, dated 31-8-91, asking them to show cause to the Assistant Collector, Central Excise and Customs, Sambalpur as to why the above amount of duty short-paid should not be paid by them under Rule 9(2) of Central Excise Rules, 1944 read with Sec. 11A of Central Excises and Salt Act, 1944. Under the circumstances, I confirm the demand amounting to Rs. 5,23,589.40 on M/s. N.K. Chemical Industries, Radharanipara, At/P.O. Bolangir under Sec. 11A of Central Excises and Salt Act'44." Reading the notice of demand, the show cause notice and the order it becomes clear as day that though demand notice was issued by Annexure-6 later on the authorities took recourse to Section 11A as it was essential for making a demand. In this connection, we notice that Section 11A of the Act contemplates calling for a show cause while issuing Annexure-6, as Sec. 11A was not complied with the competent authority took recourse to the said pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigant should be allowed to nourish a feeling that he has not been given a fair deal, a proper opportunity and adequate chance of hearing. We find, in the case at hand the determination of demand is really the result of an ex parte confirmation. The aforesaid order has been challenged before us and the writ application has been pending since 1992. We are of the view that the petitioners under compelling circumstances could not file their show cause and the authority concerned was in a hurry to rectify/amend its mistake. We do not think it proper to send the petitioners to agitate their grievance before the appellate forum. Such a direction, in our view, would amount to denial of justice and we do not intend to bury the fine flowers of justice at the altar of technicality. As we are taking this view, we quash the order of demand passed under Annexure-11 and permit the petitioners to file their proper show cause within six weeks from today. On show cause being filed the competent authority shall adjudicate the matter after giving an opportunity of personal hearing to the petitioners. The entire adjudication shall be completed within two months from the date of filing of the show caus ..... 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