2000 (1) TMI 744 - AT - Central Excise

Tribunal sets aside premature show cause notice & Order-in-Original for lack of legal authority

ITC. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, DELHI

The tribunal set aside the premature show cause notice and the subsequent Order-in-Original due to lack of legal authority. It directed the Assistant ... Demand - Provisional assessment - Hearing - Multiplicity of proceedings Issues Involved:1. Legality of the show cause notice issued during the pendency of provisional assessment.2. Validity of the Order-in-Original passed by the Commissioner of Central Excise.3. Directions for finalization of provisional assessments by the Jurisdictional Assistant Commissioner.Issue-Wise Detailed Analysis:1. Legality of the Show Cause Notice:The appellant contested the legality of the show cause notice dated 25-9-87, arguing it was issued without proper legal authority as the provisional assessment had not yet been finalized. The tribunal referred to several judicial precedents, including the U.O.I. v. Godrej & Boyce Manufacturing Co. Pvt. Ltd. case, where it was held that a show cause notice under Section 11A could only be issued after the finalization of provisional assessments. The tribunal concluded that the show cause notice was premature and thus not legally sustainable.2. Validity of the Order-in-Original:The Order-in-Original issued by the Commissioner of Central Excise was challenged on the grounds that it was based on an invalid show cause notice. The tribunal noted that since the show cause notice itself was issued without legal authority, the subsequent Order-in-Original could not stand. The tribunal set aside the Order-in-Original, emphasizing that the Commissioner had become functus officio after issuing the order and could not continue to adjudicate the matter.3. Directions for Finalization of Provisional Assessments:The tribunal directed the Jurisdictional Assistant Commissioner to finalize the provisional assessments expeditiously, taking into account all relevant materials and evidence. The tribunal clarified that the Assistant Commissioner should consider the material from the show cause notice while finalizing the assessments, provided the appellants are informed and given an opportunity to respond. The tribunal also noted that the issue of any short levy, non-levy, and consequent penal liability could only be examined after the finalization of the assessments.Conclusion:The tribunal set aside the show cause notice dated 25-9-87 and the attendant Order-in-Original. It directed the Jurisdictional Assistant Commissioner to finalize the provisional assessments expeditiously and allowed the Revenue to examine any issues of short levy, non-levy, and penal liability post-finalization. The appeal was disposed of accordingly.